6 Pillars of a Powerful Pricing Strategy

Profitable pricing starts with determining your target customers, the value you deliver to your customers, and matching the right price to this value every time you sell. A powerful pricing strategy is the most valuable and effective way to increase your profitability. 

According to Shopify’s Future of Commerce Report 2022, price is a key factor influencing 74% of consumers. That is the main reason why you need a pricing strategy. But what is the best way to create a powerful pricing strategy? Are there any tips you can apply to your business so that you can increase your customer base and drive sales?

Let’s answer all these questions for you. Today, we will help you to accomplish this by explaining the six pillars of a powerful pricing strategy that can stay ahead of the curve.

1. Define Market Positioning

Before adjusting your prices, you must verify that your products align with your target market. Positioning explains why your product is unique compared to your competitors in e-commerce. 

To understand whether your online business defined market positioning, answer these following questions:

• Are you meeting customers’ needs?
• Have you determined customers’ willingness to pay?
• Do your customers view your products regularly?
• Do your products provide quality aligned with your positioning?

Market positioning is integral to your business’ branding and how your target market perceives you. Leading online stores emphasize their market position as a number one priority. That’s why you should embody your core values as a brand and deliver that message to your customers. 

Well-executed market positioning can help your other teams, such as sales, marketing, and customer success, increase customer loyalty and retention.

2. Establish the Value

You establish the value by pricing your products based on customers’ willingness to pay. You can create your products’ worth just as much as your customers are ready to buy at the maximum level. 

Imagine that…