Pricing Strategies to Convert Online Visitors into Customers

To convert online visitors into customers through pricing strategies, businesses can use several effective approaches:

• Anchor Pricing: Display a higher original price next to the current selling price with a strikethrough and highlight the discount (e.g., “Save 40%”). This creates a perception of savings and urgency, encouraging purchases. For example, Boohoo uses this by showing inflated original prices to make deals feel valuable.

• Subscription Pricing: Offer products or services for a recurring fee with discounts for subscribers, flexible terms (pause, skip, cancel), and added perks. This builds long-term customer relationships and predictable revenue, as seen with Scentbird’s fragrance subscription model.

• Competitive Pricing: Analyze competitors’ prices to stay relevant, especially in price-sensitive markets. Offering superior value can justify premium pricing.

• Value-Based Pricing: Price products based on the value or problem solved for the customer rather than just costs. Clear communication of this value in product descriptions and customer journey enhances conversion.

• Price Skimming: Launch new products at a premium price and gradually lower it to attract more price-sensitive buyers later. This helps recoup development costs and positions the brand as premium initially.

• Penetration Pricing: Use low introductory prices to attract new customers and gain market share quickly, suitable for new online stores or digital-first brands.

• Bundle Pricing: Package complementary products together at a discounted price to encourage larger purchases and cross-selling.

Additional tips for pricing to boost conversions include:

• Transparency: Show prices early rather than hiding them, as visitors often want to know prices upfront.

• Segmentation: Tailor pricing or offers based on visitor segments such as new vs. repeat visitors, traffic source, or behaviour to better meet their needs and increase conversion rates.

• Cost-Plus Pricing: Add a fixed markup to product cost to ensure profitability while keeping pricing straightforward. Regularly review markups to stay competitive.

These strategies, when combined with clear communication and customer-centric offers, can effectively convert online visitors into paying customers.