In our previous blog article we discussed the consultancy work we were doing with a number of clients to assist them across marketing, sales and fulfilment. This has been sleeves rolled-up work being involved directly with departments and leading change management programs. The result of this has been standout performances in driving new revenues through price comparison and fostering greater customer loyalty through the introduction of loyalty promotions.
Price comparison is often seen as a race-to-the-bottom activity. However, that's a misconception since products can be both significantly over-priced (for example due to costing models when manufacturing new products) which leads to products being left on the shelf, and under-priced where there is the opportunity to lift prices and increase margins. So having product prices positioned correctly in the marketplace can and does create more bottom line for the business.
Hand-in-hand with price comparison is the need to embrace a full lifecycle pricing model. Initially a newly introduced product may attract premium higher prices expecially when it's first-to-market, but once competitors bring out their products then the pricing is likely to need to become more competitive. One of the questions here is when does that change need to happen and the answer is to use price comparison to monitor competitior price changes and analytics for conversion rate monitoring. The latter espcially helps us to maintain higher prices whilst the product is still in its 'growth' stage, but as conversion dips then we will have entered into the maturity stage where additional promotions and bundling will help to maintain sales. Ultimately the product will see a decline in sales which may lead to revamping of the product first, or heavy discount promotions especially during the Black Friday period and clearance.
Selling to a repeat customer is often quoted as being 10x cheaper than acquiring new ones, the latter often achieved using paid digital advertising or telesales teams. This is where automation really shifts the dial by providing the right promotions to customers automatically, for example a time-limited 10-15% discount off their next order, anniversary emails, abandoned followups as well as regular, relevant emailshots.
What is important is to measure the impact of price comparison and loyalty promotions through average order value (AOV) measurement (done right, the AOV should go upwards despite some discounting) and most importantly the profit on the P&L bottom line should increase during normal business trading.
During this period we activated new customer loyalty features within our REC+ software platform, enhanced reporting and improvements in our price comparison app plus additional levels of personalisation. The results showed a strong payoff that will compund year-on-year.
Interested to apply this to your business?
Please contact us today to discuss your business requirements and challenges so we can establish we are a good fit to work together on a consultancy project and the scope it needs to cover.