Don't be cagey about pricing
Category: Blog & News
Being cagey about your pricing doesn’t work. That was the key message I took from a recent survey by SAP on how Australians shop online.
As many as 6 out of 10 Australians reported abandoning an online shopping cart when shipping costs were higher than expected. 46% left the cart after using the site for a price comparison and 32% terminated the transaction because stock was unavailable.
How to address each of these issues? Here are my tips.
1. Shipping cost
People hate paying for shipping, and hate being surprised by it even more. If you charge shipping, that’s OK, but you have to be smart about how you represent it. List it on your home page, ideally as a low rate “flat” cost, and consider creating a threshold at which customers qualify for free shipping. Why? It will increase propensity to buy more to avoid paying for something they don’t value. Failing that, provide a “shipping cost” estimator before people get to the cart to ensure they know what they are signing up for.
Shipping also gives you another promotional lever. Like the mattress shop that delights a customer who is buying a $2000 bed by waiving a $50 delivery fee, consider running special “free delivery” events to drive sales.
2. Price comparison
Price comparisons are a fact of life, so it’s up to you to present your product in such a way that value seems undeniable. How? One way is to use numbers psychology to diminish the perception of cost. Consider:
- Whether to use rounded or specific numbers (e.g. $20 or $19.95)
- The sequence of mark-downs (e.g. was $45 now $25 or Now $25 was $45)
- The size of the typeface you use (e.g. whether the RRP of discounted price should be larger)
- Whether and how you should use dollar signs and decimals
You can also use choice architecture to make some products look better than others, moving the customer’s focus from a comparison between competitors to a comparison within your range.
Further, consider how you describe the products. Focus on the benefits for them (the why) before the features (the how), and what they get (the value) before the give (their money).
3. Stock availability
Out of stocks happen, but that doesn’t mean you have to irritate your customer. Include stock availability on the product page BEFORE they add to cart. Leaving it until the cart page means they have psychologically committed themselves to the purchase and will feel very let down by you. It also doesn’t hurt to have messages like “only 5 left” to increase urgency to act through scarcity.
This article also appeared in Smartcompany.
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