{"id":257,"date":"2013-04-29T09:21:13","date_gmt":"2013-04-29T16:21:13","guid":{"rendered":"https:\/\/www.nettsolutions.com\/blog\/?p=257"},"modified":"2013-06-11T11:47:52","modified_gmt":"2013-06-11T18:47:52","slug":"does-your-pricing-thrill-your-customers","status":"publish","type":"post","link":"https:\/\/www.nettsolutions.com\/blog\/2013\/04\/does-your-pricing-thrill-your-customers\/","title":{"rendered":"Does your pricing \u201cThrill\u201d your customers?"},"content":{"rendered":"<p>JC Penny (JCP) has been making headlines over the past year due to a strategic shift in its pricing model.\u00a0 About a year ago, newly hired CEO, Ron Johnson, announced that JCP will no longer promote sales and offer coupons to its customers.\u00a0 Instead, they would offer everyday low prices.\u00a0 JCP wanted to offer shoppers a no-nonsense way to shop without worrying about whether or not they are getting the best deal possible.\u00a0 Theoretically, that made some sense.\u00a0 From a business owner&#8217;s perspective, that makes even more sense.\u00a0 A simple, systematic, uniform pricing model saves labor cost, stabilizes inventory, and allows a method to manage costs\/margins much easier.\u00a0 Time and labor is money, so if you\u2019re saving those two resources, you\u2019re going to save money.\u00a0 So how did JCP miss the mark?<\/p>\n<p>A recent <a href=\"http:\/\/www.nytimes.com\/2013\/04\/14\/business\/for-penney-a-tough-lesson-in-shopper-psychology.html?pagewanted=all&amp;_r=0\">NY Times article<\/a> interviewed Tracie Fobes from Penny Pinchin\u2019 Mom.\u00a0 She epitomizes the fallacy in JCP\u2019s logic.<\/p>\n<p><em>When, a little over a year ago, J. C. Penney stopped promoting sales and offering coupons and instead made a big deal about its \u201ceveryday\u201d low prices, Ms. Fobes stopped shopping there. It wasn\u2019t that she thought the prices were bad, she said. She just wasn\u2019t having any fun&#8230;\u00a0 most shoppers, coupon collectors or not, want the thrill of getting a great deal, even if it\u2019s an illusion. In recent months, Penney recognized that human trait and backtracked on its pricing policy, offering coupons and running weekly sales again\u201d.<\/em><\/p>\n<p>JCP grossly underestimated the human aspect of its customers.\u00a0 Humans don\u2019t just buy based on price.\u00a0 We buy based on feelings and emotions.\u00a0 (Ironically, Mr. Johnson was recruited from Apple, a company notorious for selling on perceived value and brand equity, not price)\u00a0 We want to feel like we got a steal.\u00a0 It\u2019s an experience.\u00a0 It\u2019s a great feeling to see a discount on our receipt.\u00a0 It\u2019s the reason grocery store cashiers are now trained to grab a red pen and circle the \u201cclub card\u201d discount total on your receipt before you leave.\u00a0 It\u2019s not because you got the best deal available.\u00a0 It\u2019s to give you the proud feeling and emotional elation of realizing you did a great job on your purchase.\u00a0 That\u2019s what we like.<\/p>\n<p>Does the same hold true for online retailers?\u00a0 Would JCP\u2019s strategy work for e-retailers?\u00a0 Online shoppers have fewer barriers to price shop compared to brick-and-mortar shoppers.\u00a0 With a few keystrokes you can compare prices from multiple websites.\u00a0 Due to these low barriers, the assumption is that online retailing is all about price. Traditional shoppers don\u2019t have the luxury of walking or driving to 10 brick-and-mortars for price comparisons.\u00a0 If they want to touch the product before buying, their options are limited, so you don\u2019t need to be the lowest price to earn the sale.<\/p>\n<p>While online retail may be more price sensitive, you need to take a look at yourself and your competitive landscape.\u00a0 Price is important.\u00a0 However, check the ease of navigability on your site.\u00a0 Compare the efficiency of your shopping cart process compared to competitors.\u00a0 If yours is clunky, update it. \u00a0If it\u2019s ugly, redesign it. \u00a0Simplify your sitemap.\u00a0 Offer shipping deals.\u00a0 Build a <a href=\"http:\/\/www.nettsolutions.com\/retargeting\">retargeting campaign<\/a> to stay connected when they shop around.\u00a0 Note a regular price next to \u201cyour\u201d price. If your company has a mission or cause (think Tom\u2019s shoes), make it known.<\/p>\n<p>Just remember, people don\u2019t always buy based on the absolute lowest price.\u00a0 Before focusing on how to sell more\u2026 focus on understanding why people buy.\u00a0 \u00a0Tap into their emotions a bit.\u00a0 This may allow you increase sales while, most importantly, maintaining healthier margins.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>JC Penny (JCP) has been making headlines over the past year due to a strategic shift in its pricing model.\u00a0 About a year ago, newly hired CEO, Ron Johnson, announced that JCP will no longer promote sales and offer coupons to its customers.\u00a0 Instead, they would offer everyday low prices.\u00a0 JCP wanted to offer shoppers [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73,70,71],"tags":[],"class_list":["post-257","post","type-post","status-publish","format-standard","hentry","category-retargeting-remarketing","category-search-engine-optimization-2","category-search-engine-placement-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Does your pricing \u201cThrill\u201d your customers? 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