Determining Readiness for eCommerce: Evaluating Your Pricing Management Strategy
A manufacturer’s pricing management strategy is a critical focus of any eCommerce readiness assessment. The more robust a pricing structure, the more successful, the manufacturer’s aftermarket sales strategy will be. However, determining whether or not a pricing management strategy is actively driving conversions can prove a difficult task.
To determine the efficacy of their pricing management strategy, there are several criteria an organization must evaluate.
Maintaining pricing and price lists for products at both the customer and the item level within the manufacturer’s ERP will establish uniformity across all sales channels. Evaluating price lists based on customer buying behavior and modifying pricing strategies to be in line with competitor pricing should be considered good practices for eCommerce sellers. Customer discounts can also be applied to retail or list prices and should be available across all channels. Utilizing a consistent methodology for determining pricing structures should be considered a priority.
Communication is Key
Item and customer pricing should typically be published on a scheduled basis dependent upon the manufacturer’s product line and demand. In a B2B environment, notifying buyers of price changes is a good practice and should be done to ensure the buyer is aware of any changes they may encounter.
This can be accomplished through mailing lists, newsletters, and announcements within the manufacturer’s eCommerce store after a user has successfully logged in. Actively maintaining a line of communication with account buyers is a great way to establish trust and transparency.
The Customer Comes First
The customer is the single most important aspect of a manufacturer’s pricing management strategy. Understanding the nature of the customer, as well as their likes and dislikes is a step in the right direction. This understanding allows an organization to determine what difficulties buyers are having with current offerings and helps them adapt their pricing strategy to address the buyer’s needs.
Remember, a pricing structure will strongly influence how buyers perceive the value of your products and your organization. Many organizations award account buyers with pricing discounts for their loyalty to the brand. Offering customers the ability to see their specific pricing on an eCommerce site is an important element in ensuring a great customer experience.
Know Your Competition
Conducting a market analysis will aid the manufacturer in maintaining a competitive list price for all products and familiarize them with pricing across the industry. This reporting should be performed frequently to allow for any pricing updates which will reflect the current market demand.
It is always important to maintain a competitive pricing structure, but eCommerce will require especially close monitoring. The modern buyer will conduct their own research before making a purchasing decision, and it’s important that a manufacturer is maintaining realistic and competitive pricing.
There are many other variables that will play into a buyer’s purchasing decision, but all things being equal, the price can have a positive or negative impact on the sale.
Don’t Sell Yourself Short
For any organization evaluating its readiness for eCommerce, analyzing current pricing methodologies is critical to success. It’s important to establish and communicate a clear and consistent pricing structure across all selling channels. This will let the buyer know exactly what to expect―something which significantly improves eCommerce adoption.