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Should your ecommerce store advertise your lowest price or the all-inclusive price?

by Anders Bohea on November 21, 2014 , No comments

Setting a fair price and figuring out how to advertise it is essential for any business. Finding out at the check out that the price they thought they were paying has doubled makes people cross, yet startlingly good prices draw in the crowds. What’s an ecommerce online shop to do?

Conversion rates are critical

Being able to advertise an amazing price – like a flight for 99p – looks great in your adverts and can certainly be memorable. However, it’s important to consider the conversion rate as a ad is only worthwhile if it translates into more sales. Sticking with budget flights, if a user clicks on an ad ‘flights from 99p’ and finds that there’s only one seat at the price, travelling from Stansted to Birmingham at 4am, they may be disappointed enough that the £17 flight to Spain no longer looks attractive.

Online advertising comes with a host of analytic tools and metrics that let you see how many people clicked on your ad and what they did next. If thousands click through to your online shop and none buy, your advertised price is probably misleading.

All-inclusive is attractive – if it’s true

Everyone loves a bargain but savvy shoppers are increasingly wary of hidden costs. Certain businesses seem to charge extra for every little thing, giving customers a laundry list of charges on top of the advertised price.

As a result, all-inclusive prices and bundles of related items can be incredibly attractive. It’s a particularly good strategy to use when you know what your customers want – that’s why hotels near theme parks tend to have more ‘kids stay free’ offers than conference centres do.

Set the right expectations

A lot of ecommerce stores are very cagey about pricing basics like postage and packaging, card fees and VAT. If you’re losing a lot of customers at the checkout page of your ecommerce site, have a look at what’s happening there.

Misleading advertising can also net you a stiff fine, so it’s important to be honest with your pricing. As an example, if you’re selling a theatre ticket for £1 but there’s an unavoidable £5 ‘admin charge’ per ticket, you’re better off pricing the ticket as £6 from the start. the price is right

Know your market

Imagine you walk into a supermarket, pick up a carton of milk and head to the checkout. The price at the register is higher than the one listed on the shelf. Do you complain – or are you just in the USA, where tax is added at the till?

While in most transactions in Britain the tax is included in the displayed price, in some cases its added afterwards. This is particularly common for business to business transactions, where VAT may not apply, and construction work. So if your customers are mentally adding ‘about 20%’ to your prices, you’ll need to leave off the VAT to look competitive.

At boxChilli Digital we have a huge wealth or eCommerce experience, including owning and running our own million pound turnover eCommerce store, we can help you with the day to day practicalities of running an online eCommerce business.

If you are a business based in PortsmouthHampshire or elsewhere and would like to find out more how we can help you with brandingsocial media & digital marketing  visit our pages or to find more about our web design and digital marketing team
or view our portfolio

Anders Bohea – Managing Director – boxChilli Digital Marketing

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