Mark owns a lucrative furniture store in Oklahoma City, yet he hasn’t been feeling successful lately. The sales forecasts are often inaccurate due to the team disorganization while granting discounts to buyers. And since the store has no policies regulating prices, it has started to attract clients more prone to haggle, while long-time customers have begun to complain about unfair pricing.
This case is an example of why businesses need to create a pricing strategy that integrates their strengths, unique selling points, and customer needs. However, beyond manually entering prices and guidelines into your Erply PIM, you should first make sure that your company has a role with the abilities, skills and knowledge required to adjust and propose pricing strategies.
Why it is important to update product price lists
Defining prices is a complex activity that requires understanding your business, market, and the different variables that may affect your sales. If you are not sure if you should change your pricing strategy, here are some reasons why companies update their prices:
- Sales decline.
- Having prices too low or too high in comparison to their competitors.
- Excessive pressure on generating sales.
- Product lines with unbalanced prices.
- Change on the product’s perceived value.
- Frequent price changes without an end in sight.
- Introduction of B2B or B2C channels.
- Need to penetrate new markets.
Establishing pricing strategy goals
To create a successful pricing strategy, it is important to establish a main objective. Some pricing strategy goals are:
- Maximize profits in the long-run.
- Maximize profits in the near future.
- Market stabilization.
- Get customers adjusted to new prices.
- Maintain price leadership.
- Discourage the entrance of new competitors.
- Maintair distributor loyalty and get their sales support.
- Lower supplier pressure for more orders.
- Enhance brand and product perception.
- Create product interest and purchase intent.
- Exit weak products.
- Discourage price-cutting strategies from competitors.
- Improve product visibility.
- Build site traffic.
- Skim the market to obtain a higher margin by selling new products.
Creating & Implementing a Differentiated Price List with Erply
Erply price lists can be used to discount items in the system according to a set of rules. The highest price charged for inventory should always be the price indicated on the product card. Keep in mind that price lists are appropriate for any other sale prices that are not promotions, and that this feature is not available on free plans.
When you enter a price list in Erply, you can choose to implement it according to:
- Customer Group (such as B2B, B2C, senior citizen, valued client, etc.)
- Customer ID (for exclusive discounts given to individual clients)
- Time periods (fit for weekend sales, Black Friday, Cyber Monday, etc.)
- Product groups (best for promoting certain brands or product categories)
Once a price list has been associated, Erply POS will always choose the price list that gives lowest price of a product.
In this example, Erply POS will override Price list B2C and choose Price list B2B whenever a Client from the B2B customer group is entered into the sales transaction.
Price B2C: Tennis Shoes = $100
Price B2B: Tennis Shoes = $80
Going back to Mark’s case, he decided to stabilize his sales performance by creating customer segments according to their purchase volume, and then assigning those segments to differentiated price lists. The team then announced the new pricing policy to their long-time customers, which resulted in the increase of sales repetition and volume.
Need a step-by-step tutorial for managing price lists? Click here to find out how Erply simplifies pricing for your business.Sign Up