Promotions can increase traffic and conversions on your Shopify store. A well-thought-out pricing strategy is the key to maximizing the benefits of offering promotions to customers.
Get tips for creating a promotional pricing strategy that supports lasting revenue growth, and find out how an automatic discount and gifts application, or ADG, can help you implement a strategy for your online store.
How To Create a Promotional Pricing Strategy
Before you start developing a pricing strategy, you should consider the purpose of promotional pricing for your Shopify store. Whether you want to create buzz about the products or services you sell, increase traffic, incentivize customer loyalty, or unload inventory, you will need to create a strategy that aligns with your goals.
The next steps towards creating a pricing strategy include factoring in your promotional budget, profit margins, and inventory. Your operating budget should be sufficient to fund the promotion you want to run. To run a successful promotion, you should still be able to make a profit by selling higher volumes of products at lower price points.
Your store should also have the capacity and inventory to keep up with a spike in business. Otherwise, you should have a plan in place to use a limited supply of promotional products to stimulate ongoing demand.
Discount Pricing Strategy Pros and Cons
Promotional pricing can have advantages and drawbacks. The immediate advantages include a quick increase in sales from creating a sense of urgency that drives customers to make purchases before the promotion ends. Offering products at a discount can be useful for getting the attention of new customers or for rewarding existing customers for making repeat purchases.
The drawbacks of discount pricing could include short-term consequences such as attracting customers who churn at higher rates and the risk of more returned purchases following impulse buying decisions. Consumer perceptions of a devaluation of your brand or products could be a long-term consequence of not taking a strategic approach to promotional pricing.
You should work on creating a promotional pricing strategy that accounts for the type of products you sell, your customer base, and data on sales trends. Using an automatic discount app can make it easier to implement and fine-tune your strategy over time.
Tips for More Effective Promotional Pricing
You can use promotions with proportional pricing, such as buy one get one discounts, to introduce new and existing customers to more products. Offering gifts with purchases can also promote new product launches or related products.
The ADG app simplifies the process of offering automatic discounts and gifts to help you offer appealing promotions in accordance with your pricing strategy. You can easily develop, test, and publish promotions or try other techniques to increase sales.
No matter which approach you take to developing a discount pricing strategy, promotional pricing should be the exception and not the rule. Customers should feel a sense of urgency to purchase products that they consider to be a good value while on sale, but should also feel that the quality of your products justifies the regular prices.
A Promotional Pricing Strategy With Automatic Discounts
ADG is the easiest way to implement an effective promotional pricing strategy for your Shopify store. You can easily test and publish strategic promotions by installing and integrating our discount app.
Get in touch to find out how ADG can provide automatic discounts and gifts to increase first-time and repeat sales and customer satisfaction.