What are the principles and methods of personalized pricing strategy?

In order to effectively promote the online sales of products, enterprises must formulate effective price strategies for the online market. Because of the openness of online information and easy search by consumers, online price information plays an important role in consumers' purchase. Consumers choose online shopping, on the one hand, because online shopping is more convenient, on the other hand, because they can get a lot of product information from the Internet, so they can choose the best. There are many online pricing strategies. In this part, according to the characteristics of network marketing, it mainly expounds the low price pricing strategy, customized production pricing strategy, use pricing strategy, discount pricing strategy, auction pricing strategy and reputation pricing strategy.

First, the low price strategy.

With the help of the internet, sales are cheaper than traditional sales channels, so the online sales price is generally lower than the mass market price. Adopting low-price strategy means that the price must be lower than that of similar products under the condition of open price. On the one hand, this strategy is adopted because enterprises can save a lot of costs through the Internet; On the other hand, this strategy is also used to expand publicity, increase market share and occupy new markets in the online market.

When adopting this strategy, we should pay attention to the following three points: first, it is not suitable for selling products that customers are sensitive to price and it is difficult for enterprises to reduce prices online; Secondly, when publishing prices online, we should pay attention to distinguishing consumers and provide different channels for publishing price information for different consumers. Third, because consumers can easily search for similar products with the lowest price on the Internet, they should pay attention to comparing the prices published by similar websites when publishing prices online, otherwise the release of price information will be counterproductive.

Second, the pricing strategy of customized production.

Personalized customized production pricing strategy is to help consumers choose and configure personalized products that can meet their own needs and bear the price cost they are willing to pay by using network technology and aided design software. This strategy is to use the characteristics of network interaction to determine the price of goods according to the specific requirements of consumers. The interactivity of the network makes personalized marketing possible, and it will also make personalized pricing strategy likely to become an important strategy of network marketing.

Third, the use of pricing strategy.

The so-called use pricing means that customers can directly use a company's products after registering through the internet, and customers only need to pay according to the number of uses, without completely purchasing the products. On the one hand, it reduces a lot of unnecessary production and packaging waste in order to sell the products completely, and at the same time, it can attract customers who have concerns in the past to use the products and expand market share. Using this pricing strategy, it is generally necessary to consider whether the product is suitable for transmission through the Internet and whether it can be called remotely. At present, the suitable products are software, music, movies and other products.

Fourth, discount pricing strategy.

In order to encourage consumers to buy more products of this enterprise, quantity discount strategy can be adopted; In order to encourage consumers to pay on time or in advance, cash discount strategy can be adopted; In order to encourage middlemen to buy goods in the off-season or consumers to buy goods in the off-season, seasonal discount strategy can also be adopted.

Verb (abbreviation of verb) auction pricing strategy

Online auction is a rapidly developing field at present, and it is the most market-oriented and reasonable way. With the expansion of the Internet market, more and more products will be auctioned through the Internet. At present, the purchasing group is mainly the consumer market, and individual consumers are the main body of the auction market. Therefore, this strategy is not the first choice for enterprises at present, because it may destroy the original marketing channels and price strategies of enterprises. What is more suitable for online auction bidding is the original backlog products of some enterprises, or new products of some enterprises, which can play a promotional role through auction display.

Reputation pricing strategy of intransitive verbs

In the early days of the development of online marketing, consumers still have many doubts about online shopping and ordering, such as whether the quality of goods ordered online can be guaranteed and whether the goods can be delivered in time. Therefore, for enterprises with good reputation, the price can be set higher when conducting online marketing; On the contrary, the price is set lower.

In short, enterprises can choose the appropriate price strategy according to the characteristics of their products and the development of the online market. But no matter what strategy is adopted, the pricing strategy of the enterprise should be coordinated with other strategies to ensure the implementation of the overall marketing strategy of the enterprise. In addition, because the free nature of information products on the Internet has been deeply rooted in people's hearts, free price strategy is a commonly used marketing strategy. Although this strategy is generally short-term and temporary, it will greatly promote the sales and promotion of products. Many new companies have succeeded in one fell swoop with this strategy. At present, the purpose of adopting free strategy in network marketing is to let users use it for free first, and then start charging after getting used to it; Second, we want to tap the subsequent commercial value and formulate pricing strategies based on the needs of strategic development. The main purpose is to occupy the market first, and then gain profits in the market.

If customers themselves discover the company's "treacherous" personalized pricing or promotion strategy, the company will inevitably repeat the mistakes of Amazon.

Unfair?

Although personalized pricing and promotion can greatly improve the profits of enterprises, many enterprises will still hesitate: will customers feel that personalized prices are unfair? What if it causes a crisis?

Amazon's attempt

Amazon once encountered a storm. In 2000, customers found that Amazon charged different prices to different customers: the price of the same DVD sold to new customers was 4 dollars lower than that of old customers. Amazon's explanation is that this is a random discount provided by Amazon for different customers, and then re-measure the pricing of the product for each customer according to the customer's reaction to the discount.

In this way, customers feel that the more they buy, the more frequently they buy, and the more they are charged. This makes Amazon's old customers very dissatisfied: "The website thinks that customers who often buy things on Amazon have been conquered, and they don't mind or pay attention to paying 3% to 5% more for their own things." Although Amazon later explained that "this is a simple price test to investigate customers' reactions to different discounts", old customers still feel that they have been treated unfairly by "online treacherous people" (Amazon).

Some managers put forward a suggestion: "Take Amazon's method, but don't be caught by customers!" They suggest that enterprises conceal the fact of discriminating pricing, or use the guise of "lottery" to deal with customers' doubts. However, hiding is not the best way. If customers themselves discover the company's "treacherous" personalized pricing or promotion strategy, the company will inevitably repeat the mistakes of Amazon.

Set threshold

Why does Amazon's approach make customers feel unacceptable?

Do customers think personalized pricing and promotion are unfair "discrimination"?

The reason why enterprises will arouse customers' antipathy is because they have a wrong understanding of personalized prices. Carrie Johnson, an analyst at Forrester Research, once stressed: "Personalized prices are not' throwing' different prices at customers, but should be used as rewards for different customers through price reduction or coupons to provide more value for those who are willing to pay more."

Think about it, in real life, we don't feel unfair to see people in front of the queue pay lower prices than themselves because they have discount cards or coupons. Because the person in front queued for half an hour to get the discount card, or it took ten minutes to cut the coupon, and we don't want to spend these hours.

When we learned on the plane that the person sitting next to us only paid 70% of the plane ticket, we didn't feel sad. We bought the whole ticket. Because people around us may need to book air tickets three weeks in advance and can't cancel their reservations, and we need air tickets that can be changed at any time because of the uncertain itinerary.

If the discount offered is a return to the customer, the extra cost will be exchanged for the value the customer needs, and everyone will not feel unfair. What customers feel unfair is that they are charged different prices just because of their different identities.

In order to make customers feel fair, enterprises that implement personalized price strategy need to provide a "threshold" to divide the value of different parts of products. Willing to make efforts and "cross the threshold" shows that customers are willing to make some efforts or give up the value of some products in exchange for lower prices; Unwilling to "cross the threshold" shows that customers care about a certain part of the value of the product and are willing to pay for this part of the value. It should be noted that this "threshold" is not used to identify customers' willingness to pay, but only to divide the value of products, so that this part of the value can only be enjoyed by customers who pay high prices.

For example, in the case of a video store, if we charge Bob and Lucy different prices and provide the same DVD, Lucy will probably stamp her feet with anger. Lucy is willing to pay the full price of 60 yuan, because she likes to go to the movies earlier than others, and now Bob is also going out to 40 yuan to watch movies.

However, if we set a threshold: Bob only needs to pay 40 yuan for the first purchase, but it takes two weeks to get the goods. This threshold separates the value of watching movies from the value of movie content. Therefore, Lucy won't feel unfair: because Bob has to pay the cost of delaying the viewing time. At the same time, Bob is also very happy: he is willing to sacrifice the value of "watching movies at the first time" to save 20 yuan money. In this way, the video store can let Bob and Lucy buy at the first time, pay the highest price in their hearts, and be satisfied at the same time without any unfair feeling.

The future of personalized price

The failure of Amazon makes many people pessimistic about the application prospect of personalized pricing in e-commerce. Amazon itself said: "This method (personalized pricing) is stupid because it is easy to be found." They think that customers are more likely to impersonate low-priced payers on the Internet. When customers know that Amazon offers low prices to new customers, they register new users one after another, hoping to get lower prices.

Although there are few successful cases of personalized pricing in e-commerce field so far, it is undeniable that e-commerce websites have natural advantages in implementing personalized pricing compared with physical stores. They can collect a large number of rich customer purchase data, have mature personalized technology to identify customer preferences and willingness to pay, and can easily present different prices for different customers. For example, in physical stores, product prices are the same, and personalized pricing is mainly carried out by issuing coupons; But on the retail website, the prices of products do not need to be the same, which is convenient to present different prices to different customers.

As we mentioned earlier, one of the reasons why people are pessimistic about the application of personalized pricing in e-commerce is that customers can easily disguise themselves in the network, and they can get low prices by changing their vests. However, the premise of this concern is that customers can easily identify the mechanism of personalized pricing of merchants. Just like the price discrimination of airlines, the mechanism of personalized pricing does not only rely on simple principles, but gradually develops into a complex mechanism.

As mentioned in the previous example, "Victoria's Secret" once discriminated the price according to gender, but the latter mechanism has taken into account factors such as purchase history, enterprise inventory, product cost and promotion budget restrictions. Customers may easily know that pretending to be a male or a new user is profitable, but they can't know what kind of shopping history can get a discount on a product.

To say the least, even if customers finally know this mechanism, enterprises also provide a "threshold" for personalized pricing, so that customers can readily accept different prices.

Considering the inherent advantages of e-commerce and the increasingly complex pricing mechanism, we are optimistic about the prospect of personalized pricing in the field of e-commerce. In the near future, not only personalized pricing tools will be more widely used in e-commerce and other fields, but also the historical purchase data of customers will be shared by various e-commerce websites, so that enterprises can capture the changes of customers' willingness to pay more accurately and quickly. When Amazon buys the movie Chanel, evaluates good customers, and then buys chanel no.5 on perfume websites, the prices presented to them will be different from other customers. The price of goods on the website, just like air tickets, may change with every transaction of every customer every minute.

Combination of Location-Based Service (LBS) and Personalized Pricing

When you walk into Starbucks, location-based applications such as Foursquare and Shopkick allow you to "check in" on your smartphone. As a regular customer of Starbucks, Starbucks may provide you with a voucher of $65,438 +0 or free coffee. The "sign-in" of users using smart phones is not only a customer loyalty programs, but also can collect user behavior data. For example, merchants can use coupons or points to encourage users to provide more detailed information, such as what goods they bought or how much they spent when they checked in.

For example, the same two users come to Starbucks to buy coffee every day, but the time when they come to Starbucks is completely different from the drinks they buy: Tom buys a cup of American coffee every morning, and Susan buys a cup of lemon tea or China tea every noon. Then, the coupons offered by Starbucks should be different: we can give Tom a new coupon for uncooked coffee and Susan a coupon for boxed white tea. These users' behavior information can let merchants provide personalized electronic coupons for users.

With the rise of location-based service applications, merchants' understanding of consumers is not only about who spent how much money on what goods. LBS adds an important dimension of user behavior. Now we can know who bought what goods when and where and how much they spent. Beijing Bartender Training School can help us build a more comprehensive consumer interest and behavior map.

On this comprehensive interest and behavior map, personalized pricing and promotion for customers can effectively help businesses maximize profits and send the right discount information to the right consumers at the right time and place.