Have Launched an Online Business, Now What? | eCommerce Matters Ep. 005
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In this episode of "eCommerce Matters" Philip Huthwaite, Founder & CEO of BlackCurve, and Dr Rob Horton, Product Director and in-house eCommerce Data Scientist at BlackCurve, share what steps you can take after your online business is up and running.
The episode covers how you can set the right price for your products, gain visibility into your market, and how to use pricing to grow your eCommerce business.
Hosts: Philip Huthwaite (CEO & Founder of BlackCurve) and Rob Horton (Product Director at BlackCurve).
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Full Episode
Podcast Summary
Market Visibility and Brand Loyalty
When starting a new business, it's important to establish market visibility and build brand loyalty. While initial support may come from friends and family, expanding beyond that requires reaching a wider audience. This can be achieved through strategies such as search engine optimisation, targeted advertising, and engaging with potential customers. Building brand loyalty through personalised communication, offering valuable content, and providing excellent customer service helps create a loyal customer base.
Utilising Competitor Data as a Starting Point
Competitor data serves as a valuable starting point for pricing decisions. Analysing competitor prices allows businesses to understand market trends, positioning, and competitive dynamics. By comparing their prices to competitors', businesses can determine whether they want to match, undercut, or differentiate themselves in terms of pricing strategy. However, it's crucial to consider additional factors such as product differentiation, value proposition, and target market preferences to make informed pricing decisions beyond simply following competitors.
Understanding the Marketplace through Pricing
Pricing plays a significant role in understanding the dynamics of the marketplace. By analysing sales data and conducting thorough competitor analysis, businesses can identify pricing patterns, demand trends, and customer preferences. This information helps in optimising prices to maximise sales volume, revenue, and profitability. By monitoring the impact of price changes on sales performance, businesses can gain insights into pricing elasticity and adjust their strategies accordingly.
Pricing Power and Pricing Maturity
Developing pricing power and maturity is a journey for businesses. Initially, they may rely on competitor data and market benchmarks to set their prices. However, as they collect their own sales data and gain market experience, they can become price setters and leaders. This involves understanding their unique value proposition, customer perceptions, and market segments to strategically position their prices. Pricing power allows businesses to set prices based on their own value and differentiate themselves from competitors.
Strategies and Considerations in Pricing
While there are various pricing strategies and tactics available, businesses should prioritise their efforts based on their specific goals and market conditions. Psychological pricing techniques, such as ending prices with 9 or 99, can influence customer perceptions and increase sales. Rounding rules can create cleaner and more appealing price points. However, the effectiveness of these strategies may vary depending on the industry, product type, and target market. It's essential to consider customer expectations, competitor behavior, and the overall value proposition when implementing pricing strategies.
Data-Driven Approach and Optimisation
Adopting a data-driven approach to pricing enables businesses to optimise their strategies for maximum profitability. By leveraging various data sources, including sales history, competitor data, and customer behavior, businesses can gain a comprehensive understanding of the market landscape. Utilising pricing technology and automation tools can streamline data collection, analysis, and decision-making processes. Continuous monitoring of market dynamics, competitor pricing, and customer preferences allows businesses to adapt their pricing strategies accordingly and stay ahead of the competition.
Conclusion
By incorporating market visibility, competitor analysis, data-driven decision-making, and pricing optimisation, businesses can establish a strong pricing foundation. This enables them to effectively position their products, attract and retain customers, and achieve sustainable growth in the e-commerce industry.