Does your pricing “Thrill” your customers?

JC Penny (JCP) has been making headlines over the past year due to a strategic shift in its pricing model.  About a year ago, newly hired CEO, Ron Johnson, announced that JCP will no longer promote sales and offer coupons to its customers.  Instead, they would offer everyday low prices.  JCP wanted to offer shoppers a no-nonsense way to shop without worrying about whether or not they are getting the best deal possible.  Theoretically, that made some sense.  From a business owner’s perspective, that makes even more sense.  A simple, systematic, uniform pricing model saves labor cost, stabilizes inventory, and allows a method to manage costs/margins much easier.  Time and labor is money, so if you’re saving those two resources, you’re going to save money.  So how did JCP miss the mark?

A recent NY Times article interviewed Tracie Fobes from Penny Pinchin’ Mom.  She epitomizes the fallacy in JCP’s logic.

When, a little over a year ago, J. C. Penney stopped promoting sales and offering coupons and instead made a big deal about its “everyday” low prices, Ms. Fobes stopped shopping there. It wasn’t that she thought the prices were bad, she said. She just wasn’t having any fun…  most shoppers, coupon collectors or not, want the thrill of getting a great deal, even if it’s an illusion. In recent months, Penney recognized that human trait and backtracked on its pricing policy, offering coupons and running weekly sales again”.

JCP grossly underestimated the human aspect of its customers.  Humans don’t just buy based on price.  We buy based on feelings and emotions.  (Ironically, Mr. Johnson was recruited from Apple, a company notorious for selling on perceived value and brand equity, not price)  We want to feel like we got a steal.  It’s an experience.  It’s a great feeling to see a discount on our receipt.  It’s the reason grocery store cashiers are now trained to grab a red pen and circle the “club card” discount total on your receipt before you leave.  It’s not because you got the best deal available.  It’s to give you the proud feeling and emotional elation of realizing you did a great job on your purchase.  That’s what we like.

Does the same hold true for online retailers?  Would JCP’s strategy work for e-retailers?  Online shoppers have fewer barriers to price shop compared to brick-and-mortar shoppers.  With a few keystrokes you can compare prices from multiple websites.  Due to these low barriers, the assumption is that online retailing is all about price. Traditional shoppers don’t have the luxury of walking or driving to 10 brick-and-mortars for price comparisons.  If they want to touch the product before buying, their options are limited, so you don’t need to be the lowest price to earn the sale.

While online retail may be more price sensitive, you need to take a look at yourself and your competitive landscape.  Price is important.  However, check the ease of navigability on your site.  Compare the efficiency of your shopping cart process compared to competitors.  If yours is clunky, update it.  If it’s ugly, redesign it.  Simplify your sitemap.  Offer shipping deals.  Build a retargeting campaign to stay connected when they shop around.  Note a regular price next to “your” price. If your company has a mission or cause (think Tom’s shoes), make it known.

Just remember, people don’t always buy based on the absolute lowest price.  Before focusing on how to sell more… focus on understanding why people buy.   Tap into their emotions a bit.  This may allow you increase sales while, most importantly, maintaining healthier margins.

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SEO & the Art of War

“If you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.”  Sun Tsu, The Art of War

SEO has become a series of battles to be won.  Years ago, it was easy to be a one trick SEO pony and be successful.  Using link farms, bots, cheap overseas labor and other automation tools made SEO a robotic process.  Fast forward today and you’ll see an entirely different battlefield.  It’s not enough to run what we call “Ronco” campaigns (Set it and forget it).  Every month there seems to be a new Panda or Penguin update altering the landscape of the SERPs.  You need to know your “opposition” as well as you know your own business.  (Of course, I’m not saying Google is an enemy.  My point is that their decisions sculpt the challenges that we must overcome in our landscape.)

SEO isn’t easy.  You must optimize but not over-optimize.  You need good, healthy, fresh content, but not too thin and not too thick.  You need links, but they need to be quality and “natural”.  Use keywords but don’t overstuff them.  Try hard without appearing to try too hard.  Make people like you.  Now do all this without knowing the exact recipe or strict outline of the “perfect” result.

As a Certified Google SEM agency, we decided to jump into the Organic game just as Google began its game-changing updates.  How is it that our clients continue to “not be imperiled in a hundred battles” during the most volatile time in our industry’s history?

  1. As Sun Tsu states, “know yourself.”  We’ve done paid placement for years.  We know ourselves, and that has been our forte.  We’re damn good at it. As a proverbial tiger, I didn’t want to change our stripes or water down our talent pool.  I knew our paid search team were not organic SEO guys.  I set off to find an equally damn good SEO to either acquire or create a strategic partnership with.  I literally spent years meeting with SEO agencies, trying to find someone who wants to do it right, and who blends seamlessly with our culture.  I finally found one through my alumni network.  I don’t mix the two departments.  Our team members are all local, U.S.  based SEOs who only focus on being the best at what they do.  They’re passionate about SEO & Content Marketing.  This way our paid search team can continue to be the best at what they do.
  2. As the Art of War states, “know your enemy.”   We study google and learn everything we can about them.  In other words, we dedicate a lot of time and resources learning about Google’s goals, strategy, and mindset.  We don’t have one particular software or rigid gameplan for SEO.  We’re constantly changing and improving based on what Google wants.  It’s not the easy route but it is the best route.

Our clients have seen the benefits of this strategy.  We would love to help you navigate through the confusing and evolving organic search environment.  We aren’t the cheapest  SEO.  We don’t want to be.  We don’t use low cost, overseas labor.  We don’t care for it.  More importantly, we’ve learned that our clients don’t want “cheap” either.  As written in a great Harvard Business Review article:

Orange County SEO Company

– Michael Won
“Formerly Ungoogleable”

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