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DigiCom Contributor

We Identified 5 Pricing Strategies Customers LOVE

Updated: Jul 31



Prime Day just ended, and if you’re anything like us, you’re still buzzing from all the deals and discounts. It got us thinking about the different ways sellers attract customers with their pricing strategies. 


It’s always fascinating to see how sellers come up with creative ways to get us to click that “buy now” button. With so many offers flying around, it’s clear that pricing strategies are a big part of the game plan.


But what really makes a pricing strategy work? What turns a good deal into a great one that customers can’t resist? 


Contrary to popular belief, a great deal is so much more than just slashing down prices. Think about it—when a deal really clicks, it’s often because it’s exactly what people are looking for. Maybe it’s the thrill of getting a bargain, the satisfaction of free shipping, or the convenience of a bundled offer. 


A great deal goes beyond the numbers; it creates an experience that makes customers feel like they’re getting something more than what they’re paying for.


Here are five common discount strategies we’ve noticed that sellers use to keep shoppers happy and their businesses thriving:


Discount Pricing



Discount pricing is one of the most common ways to promote sales. It's great for boosting store traffic or clearing out old inventory and typically comes in two forms:


Dollar Off: Like $20 off

Percentage Off: For example, 20% off


Studies show that for higher-priced items (anything over $100), people find dollar-value discounts more appealing than percentage-based ones. For items under $100, a percentage discount feels like a better deal to the brain.


Tips To Keep In Mind:


Limit Discount Events: Focus on selected products or collections, especially higher-priced items, to increase your average order value (AOV).


Set an End Date: If a product is always on sale, it loses its appeal, making customers think it’s not that special. Clear deadlines also help avoid any confusion.


Reserve Sitewide Discounts: Save these for big events like Black Friday and Cyber Monday.


Show the Savings: Put the regular price (usually crossed out) next to the sale price to highlight the discount. We've done this with some of our clients, and it has worked very well. 


When people see the original price crossed out, it visually reinforces the value of the discount and creates a stronger perception of savings, making them feel like they’re getting a great deal.


Lead with the Condition: When promoting a discount, say "Spend $100 and get $20 off" instead of "Get $20 off when you spend $100." People respond better when they hear the “bad news” before the good.


Why Lead with the Condition?


Research shows that people like hearing the bad news first, followed by the good news. So, starting with the condition (the “bad news”) and then mentioning the discount (the “good news”) works better. Here's why:


Order of News Preference: People prefer to get the bad news first followed by the good news, making the offer seem fairer and more attractive.


Perception of Control: When you lead with the condition, customers know exactly what they need to do to get the reward. This makes them feel more in charge and like they’ve earned the discount, which can make it feel more significant.


Enhanced Deal Salience: Starting with the condition makes the discount more memorable and noticeable. This highlights the offer better, making it more attractive and increasing the likelihood that customers will go for it.


Improved Click-Through Rates: Research shows that leading with the condition boosts click-through rates and potential sales. When customers see the requirement up front and then the reward, they’re more likely to act on the offer and complete their purchase.


Using these tips can help you make the most of your discount pricing and drive more sales.


Buy One, Get One Free (BOGO)

Which is more appealing from a shopper's standpoint?


  1. Buy two, get 50% off

  2. Buy one, get one free


Personally, I think the second one seems more enticing.


Even though both deals result in the same cost, the simple BOGO phrasing tends to be more appealing because of a psychological pricing strategy known as innumeracy. In short, people prefer not to do the math, and "Buy One, Get One Free" is easier to understand.


Plus, people just love the word FREE! I mean, who doesn't, right?


While BOGO deals can be very effective, they aren't suitable for every product. Avoid using them for luxury items or products with small profit margins.


Tips To Keep In Mind:


Clarify the Deal: Not everyone knows what BOGO means, so make sure to explain it clearly. Use standard language like "Buy One, Get One of equal or lesser value free."


Alternative Offers: If a full BOGO deal is too costly, consider alternatives like "Buy one, get the other 50% off" or "Buy three, get one free" (B3G1).


Use Visuals: Feature product photos or illustrations to emphasize that shoppers are getting more for the same price.


Set Clear Parameters: Be careful with your terms to avoid undervaluing your products. You don't want customers thinking, "They must have too many of these if they're giving them away."


Using these strategies can help you implement BOGO promotions without reducing your product's value.


Tiered Discounting


Unlike standard discounts and BOGO deals, the “buy more, save more” approach of tiered discounting is designed to boost your average order value (AOV).


The idea is simple: the more customers add to their cart, the more they save. This strategy is also great for encouraging both cross-selling and upselling.


The key here is to make shoppers feel like they’re losing out if they don’t reach a certain spending level. Let me give you an example:


Let’s say your average order value (AOV) is $50. Here’s how you could set up your tiers:


  • Tier 1: Spend $55 and get 10% off

  • Tier 2: Spend $75 and get 15% off

  • Tier 3: Spend $100 and get 20% off


In this example, a customer who typically spends $50 is encouraged to add just a bit more to their cart to reach $55 and save 10%. If they aim for an even higher discount, they might add more items to hit the $75 or $100 thresholds. 


Tips To Keep In Mind:


Creating tiers that benefit your business involves some calculations:


Minimum Purchase Discount: Start by calculating your typical AOV.


Add a Percentage: Increase this amount by 10% to 20% to set your first threshold.


Subsequent Tiers: Add more tiers above this initial threshold to encourage even higher spending.


Bundling


Bundling is a promotional pricing strategy where you package products together and sell them at a reduced price. 


Here’s a situation where bundling would work in your favor:


Let’s say you run an online store selling skincare products. Your night cream is extremely popular but your cleanser and toner aren't due to their higher prices. What you can do here is bundle up these 3 products!


Create a "Complete Skincare Routine" bundle that includes the night cream, cleanser, and toner. Price the bundle at $75, whereas buying each product separately would cost $100.


Why This Works:


Increased AOV: Customers who were only buying the night cream for $40 are now spending $75.


Product Introduction: Customers get to try the cleanser and toner, products they might not have purchased on their own.


Customer Satisfaction: Offering a complete skincare routine provides convenience and improves the customer’s overall experience.


Some other benefits of bundling:


Cost Savings: Customers save money by buying the bundle rather than purchasing each item separately.


Convenience: Bundling offers an all-in-one solution, making it easier for customers to get everything they need in one purchase.


Product Use: Bundles can help customers understand how to use the products together.


There are two types of bundling, which includes:


Pure Bundling: Products are only available as part of a bundle, not individually.


Mixed Bundling: Products are available both as part of a bundle and individually. This approach is more popular because it provides both flexibility and allows customers to save money.


Tips To Keep In Mind:


Show Savings: Display the price cut compared to the total cost of buying the items individually. This helps customers see the value they're getting.


Use Visuals: Show what's included in the bundle with clear images. Visuals can effectively communicate the contents and benefits of the bundle.


Free Shipping


According to Hotjar, the average cart abandonment rate is around 70%. This means that only three out of ten shoppers who add items to their online cart actually complete the purchase. That’s less than half!


One major reason shoppers abandon their carts is high shipping costs. 48% of consumers leave their cart during checkout because the additional costs — like shipping, taxes, and fees — are too high.


We understand that most Shopify merchants can’t cover shipping costs for their customers. However, since 58% of consumers will add more items to their cart to qualify for free shipping, setting a minimum purchase requirement can be a good compromise.


Just make sure the minimum purchase amount is carefully calculated and doesn't eat into your profits. Don't just pick an arbitrary number; do the math to find a threshold that works for your business.


Final Words


So there you have it—five pricing strategies that customers love!


With these strategies, you can make your pricing more attractive and increase both conversion rates and AOV. The key is to understand what makes your customers convert and meet them halfway.




SO, WHERE DO YOU FIND THIS PARTNER?


Well, aren’t we glad you asked! We at DigiCom are obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all platforms and placements and provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.




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