What are the important rules of ecommerce pricing?
The Atlanta Falcons of the National Football League recently announced a new initiative called “Fan-First Menus.” I am a Carolina Panthers fan, so you should know how much it pains me to admit the Falcons got something right, but with Mercedes-Benz Stadium offering $2 hotdogs, $3 nachos, and $5 beer, I find myself wishing the Cardiac Cats would take a cue from the Dirty Birds.
The announcement was a hit. It lit up social media with positive comments showered on the Atlanta Falcons and Mercedes-Benz Stadium, not only the team’s venue but host to other sports teams and events. With a shift in pricing, the stadium captured the day’s headlines and built a buzz for the upcoming season that will likely lead to an increase in ticket sales and concession purchases.
The business world loves sports metaphors, and this is no exception. I suggest that online sellers take a few tips from the Falcons. But how does Mercedes-Benz Stadium’s pricing model relate to our online businesses? What does it teach us about ecommerce pricing?
Use Customer Surveys
You don’t have to read your customers minds anymore. People are more eager to share their feelings than ever before. They’ll tell you honestly and directly how they feel.
Through fan surveys, the NFL and the Atlanta Falcons consistently found that the least popular aspect of the game day experience was the price and quality of concessions. Any seller knows that lowering the price of a product will be enjoyable to a customer, but through the survey Mercedes-Benz Stadium became aware that quality was just as big of a factor as price in customer’s negative feelings toward concessions. They knew to lower the prices but remain conscious of the quality as well.
How can you effectively survey your customers?
You can use social media to reach out to them directly. Twitter has a polls functionality that’s a fun way to gauge your followers on new products or current satisfaction. It allows you to ask one question at a time, keeping your surveying efforts focused and the results more manageable. If you want to create a larger customer feedback initiative, there are tools designed to manage your surveys and compile your results for you. Still, there’s no substitute for good ol’ fashioned conversation.
The answers you receive will be more personal and your customers will feel like direct participants in your brand.
We all have different values when we buy. If you’re like my girlfriend, you’re going after the lowest priced item every time. I’m more drawn to quality and long-term value, and as a rule, I tend to avoid whatever is the lowest priced item. So, which ecommerce pricing model would get both of us to buy? The one that offers price diversity.
This is an example of what the Harvard Business Review found in a study a few year ago. Lower priced items do not devalue higher priced items. That’s why Mercedes-Benz stadium will increase the diversity of their offerings by adding 65% more concession locations. These will include higher-end premium items from national partners sold at the same price you would find in restaurants. The stadium is able to use the lowered prices on certain concession items to bring in even more expensive premium items.
When you offer your customers a choice you’re giving them a sense of freedom.
There’s a reason why most of us would happily drop $100 on a new outfit but grumble when our electricity bill reaches into the triple digits. It’s because we have no problem choosing to spend more on what we value. Allow your customers the opportunity to express their values by diversifying your offerings. For example, if you sell party supplies, lowering the prices of your standard birthday cake candles and solid-color balloons will allow you to charge more for trick candles and balloons shaped like numbers. Maintaining balance in your ecommerce pricing while maintaining quality will attract more buyers.
We can do the math all day on what impact fan-first pricing will have on Mercedes-Benz Stadium’s bottom line, but we can already see the impact on public relations. Even naming the promotion “fan-first” is an intentional move that demonstrates a commitment to providing an enjoyable experience for their fans on game day. Happy customers become repeat customers. Not only will fans be more likely to return to the stadium for the low prices, but also because they feel as if they are valued by the team and the organization.
Put a value for your customers at the forefront of your ecommerce pricing. Too often we think about our customers solely as a means to an end. We have the products, they have the money, and we want them to buy from us on Amazon, eBay, or our own website.
But as human beings, we all want to feel valued, appreciated, and acknowledged.
What are some ways that your business can use ecommerce pricing to show your customers that they are not just a number on a sales report, but a valued member of a commerce relationship?
Mercedes-Benz Stadium did this by responding directly to fan feedback and communicating those changes in a way that emphasized families, affordability, and appreciation. You can do this too. Offer a half-off special to customers who bundle their purchases. Give birthday discounts.
Smaller businesses have the bandwidth to show customer appreciation in a variety of ways that a larger company might not. Including this in your ecommerce pricing strategy is an opportunity you shouldn’t miss. Be sure to take advantage of that opportunity.