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Increase Engagement and Revenue While Saving Time and Money with Dynamic Content Personalization

According to Cialdini’s principle of persuasion, liking, the more you like someone the more likely it is that you’ll be persuaded by them. This persuasion is even stronger if you feel akin to who is saying it. Translate this into the concept of personalizing content. If you see a picture of someone who reminds you of yourself – are you more likely to purchase? If someone like you has purchased something, do you feel more compelled to try it? As a marketer striving to optimize your content and deliver effective personalized messaging that increases engagement, you should be considering how to incorporate more persuasive content into your communication channels. Dynamic content personalization allows you to place more “likable” content in your customers’ emails, effectively increasing engagement and conversion rates. Rich Relevance found that revenue is 5.7 times higher in emails that employ personalization.

Now, consider the content that lives within your customer journey. Where segmentation was once the answer to personalizing content, dynamic email content is now favored for faster, programmatic personalization that reduces effort and optimizes workflow. This content can be dynamically changed based on the data you have within your send data source. Some examples of data that can be used to trigger dynamic content strategies include:

Demographic – age, location

Behavioral Data – recently viewed products, added to cart

Psychographic – lifestyle, interests

A dynamic content strategy is best aligned with strong data collection and structure. The second piece is choosing an email service provider that allows your email templates to read and personalize content from your data source. If you are on the fence or you may be considering changing your email service provider for advanced marketing capabilities, read on!

Maximizing Resources

In my current team, I have just one content specialist and one email developer. Together we manage over 30 million emails a year and are responsible for roughly 10% of our online revenue. Working with limited resources means finding any way to effectively send our valuable emails while working towards incrementally increasing email revenue. The ability to create dynamic emails leveraging a single data source, as opposed to multiple segmented lists, means more time measuring and scaling our most effective journeys. Where segmenting calls for different templates with minor changes, dynamic content allows you to have one email template which triggers different content based on information in your single data source. This could be swapping the main image for your family versus non-family segment so they feel more aligned with your messaging, or merchandising an alcohol drink package for guests over 21 while highlighting unlimited soda packages for guests who are under 21.

Get More Granular with Your Relevant Content

As consumers are bombarded by a constant stream of emails and mobile notifications, it’s become increasingly important to stand out as a brand. Dynamic email content allows you to strategically align your content with what you know about your customer to ensure they are served the most relevant content at the right time. This can be applied to your hero images, your product recommendations, or offers that appear based on behavioral information like abandoning a cart. Dynamically replacing and placing this content can have a drastic impact on conversions as the more often you place the right content at the right time, the higher your chances are of converting them.

The use of dynamic email content allows you to keep a single source for your email list, drastically reduce the number of managed templates, and, when set up properly, can easily track the effectiveness of your variations as they contribute to conversions.

Increase Retention and Engagement

According to Rich Relevance, personalized emails deliver 5.7xs on email revenue. The content delivered should be solutions to their problems, reducing friction in the buying process to shorten the sales cycle, or delivering information relevant to the customer experience. The more frequently you get the content right, the higher chances you have of the customer continuing to engage with your content. This allows you to build a better relationship with your customer where they can expect useful content and look forward to engaging with your emails. This helps move them along in your journey, nudge them down your funnels, and builds brand-loyal customers who truly love your brand content and want to advocate for you. If you’re not sold on the value of building a brand, check out my post “Is Building a Brand Worth It?”.

“By taking the time to get to know the customer and collect the necessary information you need to further personalize their experience, you are moving closer to faster conversion, which shortens your sales cycle.”- Lucinda Honeycutt, SEMRush Blog.

Dynamic content leverages the data you are collecting about your customer to deliver persuasive, relevant content at the right time. Your 2021 marketing strategy should absolutely contain a dynamic content personalization strategy. It will lead to better engagement, more conversions, higher retention, and increased loyalty. The payoff goes beyond your performance metrics to also maximize a smaller team with fewer resources while still increasing incremental revenue.  

If you want to turbo-charge your personalization capabilities, take a look at how Salesforce AI can help marketers make faster, smarter decisions here.

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How Artificial Intelligence (AI) Puts the FUN in Funnel Marketing

2020 in the cruise industry has been a roller-coaster for all brands, but the best have used this time to ramp up their digital experience, expand their online offerings and improve their customer’s path to purchase. As manager of the booked guest website and pre-cruise email series at a major cruise line, I am responsible for attracting, engaging, and delighting guests who have already booked their cruise and are excitedly awaiting their unforgettable experience at sea. 

In the cruise industry, we are given a gift and a curse – too much data. When managing communications through funnels, optimizing content for engagement and conversion with high volume and high velocity, leveraging data can seem like a daunting task. So how does a marketer keep up? The answer may be artificial intelligence. 

Recently, my team and I transitioned our booked guest email series from SAS CI (a far more complex CRM which requires SAS expertise) to a robust journey on Salesforce with Journey Builder replacing all of the logic once living inside SAS CI processes. While this was a feat in and of itself, I was most excited to learn more about Salesforce’s AI – Einstein. Here are just a few of the ways, AI, and more specifically Salesforce’s Einstein can improve your funnel’s performance at various touch points in the customer journey by discovering insights, making smarter recommendations, automating tasks, and predicting outcomes. 

Modeling with Look-Alike Audiences

While there may be a dedicated team for building models for the pre-booked and pre-cruise experience, having models to leverage solely across email and mobile are great assets for optimizing your communication channels. Einstein gathers traits and behaviors from current customers, such as emails they’ve opened or links they have clicked, then creates a model that can be leveraged to seek new consumers who share those same characteristics. While most brands would leverage this externally in Facebook or Google advertising, this data can also be leveraged internally to match less engaged guests with the right journey to convert them. This AI capability allows you to target and scale your most successful purchasing funnels across your entire available audience using the data collected across your various channels. 

Cross-Device Identity Management – Einstein’s CDIM

The cruising guests’ journey can be severely disjointed from the pre-booking phase to booking and especially as some of our systems are antiquated and not collecting the best data records. Luckily, Einstein’s Cross-Device Identity Management (CDIM) capability, uses an algorithm to stitch together a profile of a guest across devices and platforms. Understanding at what time and on what device a guest is most likely to engage with your content empowers you to deliver the “right content at the right time”. As Hubspot (Links to an external site.) states, 

“Inbound marketing focuses on creating quality content that pulls people toward your company and product, where they naturally want to be.” 

Allowing Einstein to curate the best time and best place, lets you focus on creating the right content.

Customized Predictive Capabilities

In the past, I have worked with other machine learning tools that were limited by the kind of data that could be leveraged and the time it took to build enough volume to have insights that could be activated. What I have found most exciting about Salesforce is they allow much more flexibility and are truly tailored to your data. Using Salesforce’s Automated machine learning (AutoML), marketers can collect and store data, be notified for irregularities and inconsistencies, identify significant product features as it relates to purchasing and rank strong influencers in the buying decision. These translate to easy to use merchandising capabilities such as the “Recommended For You” carousel that can easily be propagated in your emails. 

While the above is specific to the booked guest cruise experience, they hold true for any marketer looking to automate personalization and optimization of their customer journeys. Leveraging AI with mass amounts of data can help marketers make faster, smarter decisions for email and push. In considering how you can optimize your customer journeys’, Salesforce’s Einstein capabilities can be a great business asset. Plus, if you’re a data nerd, you can put the Fun back in Funnel for you and your guests.

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Comparative Funnel Analysis: Understanding Your Funnel to Deliver Better Customer Experiences with better ROI

In eCommerce, sales funnels are the foundation to understanding your business. It is a way to analyze your customer behavior in various marketing activities as steps that rely on each other for increasing conversion, retention and guiding a customer towards loyalty. Think about your ideal buyer or visitor process. Where do they land? What should they do next? What’s the end goal? Through funnel analysis, we hope to gain insights into the motivators and activators for each step in the path to an action. You can then use this to develop a strategy that nudges them towards an end goal and maximizes spend for conversions and ROI.

Depending on the complexity of your digital experience, it’s likely there’s no single way to visit your site and reach these goals. That is, you can’t guarantee a visitor will always start at your specific page, like your home page, and end up at checkout. So how do you assign a value to each possible path and where your marketing efforts are best placed? This starts with understanding there are multiple funnels within your business, and they should be measured against each other. Through comparative funnel analysis, we can identify and improve the ways a guest can interact with your experience to reach a goal.

The AAARRR model simplifies and categorizes your funnel in to 6 steps – awareness, acquisition, activation, retention, revenue and referral. Comparative funnel analysis will measure the difference between the various versions of this, allowing you to optimize spend and conversion rates.

When comparing your funnels, there are some pitfalls and innovative solutions. It’s not always apparent which of your funnels are immediately valuable and worth investing in. This can be especially hard with limited tracking as understanding completion and abandonment is crucial for optimizing funnels. Google Analytics offers flexibility with assigning various stages through “custom funnels”. This allows you to quickly define funnels as they relate to your business. Having the flexibility to create custom funnels makes it less of an investment, of time and resources, to explore additional funnels.

Marketers have also started to pay attention to “split funnel” attribution. When looking to your funnels and deciding payment, you may be duplicating vendor costs or giving credit incorrectly to a single source for your customer’s activities. By splitting your funnel, you are able to more accurately compare your funnels and identify the best channels and strategies to invest in. That way, when you compare various funnels you are presenting an accurate analysis of the influences leading to a purchase.

Comparing your funnels as a series of steps can leave out user-based analyses that help identify the best funnels based on a particular segment. By considering segments such as device, browser, country of origination, and a number of other factors that may differentiate the experience, you are able to develop paths to purchase more specific to the user. This gives you the opportunity to place customers in the most likely funnel to convert.

Replacing Marketing Basket Analysis with AI Product Recommendations in Email

As eCommerce marketers, we are constantly searching for contextual communications that leverage various data points to optimize conversions and lift incremental revenue. Consider your businesses shopping behavior data. If you’re only using this for revenue reporting and inventory analysis, then it’s likely you’re, literally, leaving money in the shopping cart. According to Barilliance– personalized product recommendations increase conversion rate 5.5 times!

Analyzing baskets requires the creation of associations rules, statistically significant trials through a large amount of transactions and the analysis of very large data sets. So what’s the quickest path to data driven, personalized recommendations that deliver the promised increase in incremental revenue and conversion rates? Artificial Intelligence (AI) allows you to leverage the power of data science in constructing stronger personalized recommendations by automating the calculation of patterns within your existing and incoming commerce data. That’s a fancy way of saying – it does all the work for you. If you’re on the fence of automating your merchandising, take a look at some of the smarter recommendations you can make with the help of automated machine learning. That means – no data scientist needed.

“You May Also Like”

You May Also Like, is an implicit product recommendation that leverages past purchasing data, live data and even what you know about a customer to merchandise products in an email to merchandise products that are similar to products they’ve engaged with or may be interested in based on what you know about them.

Where should it live?

This kind of recommendation is best used in the context of extending a customer journey and wallet.

“People Like You Buy”

In a previous post, I discuss Cialdini’s principle of persuasion liking as it relates to product recommendations. By stitching together a person’s viewing history and comparing it with similar shoppers behaviors’, you can create a relevant recommendation that persuades customers to purchase. Consuming and processing this much data in a way that confirms it’s significance requires the assistance of automated machine learning. Consider, Salesforce’s Einstein for easy to use AI capabilities.

Where should it live?

People Like You Buy is a great way to increase engagement and nudge a shopper towards a most likely eventual purchase.

“Frequently Bought Together”

Frequently Bought Together is a great way to increase order value by identifying purchasing patterns within your commerce data linking product purchases together. This cross-selling technique can also leverage your commerce data with your demographic data to create multiple tiers of recommendations that is truly personalized to the customer.

Where should it live?

Try using this towards the end of purchase and even in post purchase communication for maximum impact. This creates a narrative between the two as well as reaches them when they are most ready for action.

Leveraging purchasing behaviors to create contextual content that’s engaging is a great way to improve your customer journey and maximize conversions. While these are just three examples, it’s evident that complicated basket analysis is no longer the only way to increase your email conversion rates. Skip the data scientist – and consider A.I.

Qualitative vs Quantitative Research: How to Decide Which Research Type is Right For You

As a business owner or marketer in the quest for actionable insights, we often find ourselves looking to fill in the gaps in our understanding of our business and customer. Marketing research does just that and more! If you’re new to market research and the market research process you may not know where to begin and what kind of research you need to resolve your burning questions. The first step in the marketing research process is identifying the research need and the questions you are trying resolve. Doing so will set you up to design your study and ultimately, answer whether qualitative or quantitative research is best suited to answer those questions.

Need a refresher on the marketing research process? Here’s a diagram from My Market Research Methods.

6step.png

 When should you consider qualitative research?

Qualitative research is most effective in situations you wish to further develop or dig deeper on. It’s directional, not definitive and therefore results do not speak for the entire applicable population. Consider the scenarios in which you wish to understand underlying emotions. Unlike quant, qualitative research allows you to emphasize the emotional, verbal and observational components of responding to questions. Consider that structuring this data into actionable insights can be costly in time and money.

When should you consider quantitative research?

While qualitative provides you with directional data that can offer insights in to meaning, subtext and context – qualitative can offer the confirmation and definition you’ve been looking for. Quantitative is numbers and statistical analysis based. Surveys completed through quantitative research are structured to provide answers to one question at a time. If you’re looking for “how much” or “how many”, quantitative research has the conclusive answer you’re looking for.

The guide above just scratches the surface on the capabilities of quantitative and qualitative research to answer important questions and resolve business challenges. Ultimately, which you choose is largely based on where you are in understanding the issue at hand. Are you just kicking off and in need of a more conceptual understanding? Or, are you diagnosing and resolving a specific detail of a largely defined and understood process? In any case, no matter how well you know the subject matter, marketing research can quickly prove to be valuable in furthering your most important marketing decisions.

Looking for ways to package and present your existing data with data visualization tools? Check out my post comparing Tableau with Canva!

The Power of Silence in Marketing Communications

Marketers are constantly looking for ways to improve communication while defining the path to an action. A less commonly known fact about communication, is how much of it is comprised by non-verbal communication. According to Albert Mehrabian in his book, Silent Messages, the breakdown of communication attribution is as follows:

10% – words

35% – vocal tone and pace

55% – nonverbal communication

As marketers, how can we leverage the power of silence, or the absence of something, to build deeper, better communications that result in stronger connections, ad recall and ultimately conversions?

Cialdini describes 6 principles of persuasion, one of them being authority. Pausing, thoughtfully, before speaking gives you a chance to build more meaningful, deep responses. Consider how adding silence can give the viewer a chance to reflect on your message and make them more likely to accept what you’re saying.

Nike’s “What Girls are Made Of” features fleeting moments of silence. Though brief, the moments of silence bring impact to the message of empowerment and challenging societal norms. In this ad, silence builds authority by using music contrasted with silence to create a heightened level of engagement with what the ad says.

Gaps can be more than absence of sound. Take the Colsubsidio series of ads for their book exchange. The ads featured incomplete silhouettes of fairytale characters contrasted against negative space. The absence of features creates tension and intentional chaos to make an appeal to logos. These elements worked together to make an engaging memorable ad for the event.

Lastly, consider how communication should be a two-way exchange. In your marketing communication, silence allows the recipient to express themselves and engage in a more organic authentic way. In both Nike’s “What are Girls Made Of” and Colsubsidios Book Exchange ads, the viewer is left with a moment to immerse themselves in thought and develop a relationship with the brand built not just on receiving information, but engaging through thought.

Introducing silence may be a new concept for your brand and new things can be risky. If you’re concerned about this, consider A/B testing your content. Check out my quick introduction video to A/B testing here.

It’s often in the absence of things, true value is found. What value will your target audience find in your communication’s silence?

Tableau vs. Canva – Which Data Visualization tool is right for you?

You’ve been told at least a hundred times on LinkedIN, vendor emails and marketing conferences that data visualization is a great way to gain actionable data from various data points in your business. In the face of large amounts of information, data visualization can drive insightful conclusions, identify gaps in information and assist in finding trends and patterns. When you’re challenged with limited resources and time restrictions, one of the biggest hurdles can be making a decision on what tool is right for you. That’s why I’m going to break down two of the key players in the data visualization game, Canva and Tableau, highlighting ways to identify which solution is right for you.

Before you even look at a side by side comparison, it’s important to start by jotting down a few key details about your business. This is actually a great way to look at any potential addition to your business tool stack.

  • Who do you have on your team?

Every data visualization tool is made with an ideal user in mind. If you’re preparing to invest in a tool, you should make sure you steer towards who you envision using the tool as well as where and how fast you’d like the person or team to use it and expand their current capabilities. While one tool may offer more benefits than the other, the cost difference can be significant. If your team is not ready to use the full functionality list, this can be an excessive expense where the simpler tool would have done the trick at a fraction of the cost. Focus on your team strengths and who the key players are in decision making. Is this for analysts, leadership, managers?

  • What are your data sources?

Consider all the places actionable data lives in your company. What are you using for email? Where are you collecting orders? Are you marketing on social media? Different tools may have limitations with which third party tools you can integrate with so compatibility will be key in reducing setup costs and time. While there are workarounds for non-native integrations, these can be time consuming and not as cost effective. Be sure to make note of what data extract options you do have with each data source (API, Cloud, Excel Sheets, etc).

  • What kind of information are you gathering and how do you intend to use it?

Following up on what your data sources are, take a catalog of what data you have available. By starting with a clear outline of all the attributes you have available, you can consider what you’d like to leverage, and start to envision strategic growth initiatives that may be attainable depending on the visualization tool you decide on. It’s also important to consider who you are presenting to. What’s the best way to present the data they need as well as point out something they may not be aware of?

Now that you know what you have, what you’re looking for and what your strengths and limitations are, you can quickly identify the tool that’s for you. A side by side comparison of the two makes it easy to identify the key specifications and how they differ. I’ll highlight 10 important features that are most likely relevant to your business and will follow up with additional specifications that may be useful for you.

Heavy on Data vs Heavy on Design

Side by side it’s easy to quickly identify the strengths and differentiators of each tool. Tableau is heavy on the data customization, source options and overall custom/ad hoc capabilities. This is a marketers and analysts DIY report system for descriptive, diagnostic, prescriptive and predictive visualizations. Canva, offers that same level of flexibility only, with design. This is for more straightforward data, from less sources, that is needed to present conceptual information (family tree, site map, org charts) and simpler visualizations (trends and comparisons). Canva also provides a lot of design functionality not specific to data but useful in presentations like backgrounds and stock images. 

In conclusion, flexibility, data sources and end recipient of your visualizations is the key to defining which tool is right for you. Be sure you are aligning this with where you are in terms of resources and how actionable you can be before diving into a more expensive visualization option, or one which will not allow for scalable growth of your analytical capabilities.

New to data visualization? Check out my Intro to Data Visualization post.

It Takes a Community to Build a Brand

In 2018 I had the opportunity to join one of the leading brands in the personalized subscription service space. While they are easily distinguishable by their brand partnerships, celebrity affiliations and their ability to target you with an ad…literally anywhere…an inside view paints a picture of a brand whose unique experience is centralized by their devoted online community.

As a member, your “personalized experience” was driven and influenced by the brands’ desire to build a long-lasting connection through delivering products, content and services to subscribers across every medium.

If you’re a marketer and have not considered the value of brand community in your marketing plan, here are just some of the benefits of a good community strategy.

Customer Satisfaction

If your community is engaged, the forum can act as a soundboard for what your brand is doing right or wrong. This also gives you an opportunity to collect first hand feedback on customer sentiment. Using this information can identify frustration, enhance messaging and offer solutions. Solutions can be in the form of product innovation, experience optimization or simply giving a guest a faster solution to common problems.

Customer intent

What are people looking for when they choose a moisturizer? How are guest shopping for makeup brands, is it company value? Ingredients? Price? A community forum is a great way to discover customer intent in a more psychological way than behavioral data can provide. We received lots of storylines for actions we were observing in purchasing habits. The community also proved to be a great source of guidance for shaping the path to purchase around the noise found on our channels.

Brand Loyalty and Advocacy

Many members sought advice on how to resolve issues, which products to select and even on occasions solicited support on technical issues. By including brand buyers, merchandisers and partner brand representatives to engage with guests, the forum became a staple of the services provided by the subscription. The brand provided a controlled environment where the community truly leaned on each other and supported engagement with various aspects of the brands experience. This lead to guests feeling more fulfilled by their subscription.

Your community gives you the chance to build a stronger relationship with your subscribers. By placing the community at the center of your brand engagement and their experience you build loyal fans who advocate for the brand and make loyal fans out of other subscribers.

Add Brand Value

With a community of over 1 million members, the community was gated to paid subscribers and added another value proposition to the subscription service. Real relationships were built on this site providing members with peer recommendations, personal support and quality discussions with members on similar issues they may be trying to resolve through product purchases. When surveyed, guests identified the community as one of the top reasons for continuing their subscription even when product assortment wasn’t exactly what they wanted.

By inviting guests to engage and actively participate in the exchange before and beyond a purchase, you co-create additional brand value, foster loyalty and support brand advocacy. A community can also provide you with customer insights useful in providing support, reducing call volume and providing insights with product innovation.

Planning Your A/B Tests to Ensure Accurate Representation in Your Sample

An A/B test, when used properly, is a great way to enhance your customers’ experience and optimize your marketing funnels by testing various content and user experiences before expanding to your full audience. When used incorrectly, an A/B can eat up resources, take too long to reach significance and lead to misinterpretations of the success and failure of your test.

As a marketer in the travel industry, or in any industry heavy on first-hand user data, there is a common issue of choosing a sample that gets you to statistical significance but is not an accurate representation of the intricacies and diversities within your audience. This leads to a new feature, content change or functionality that ends up having a negative impact on your conversion rate. Even worse, it may lead to customer frustration or a disassociation from your brand.

While tools like Optimizely can make it easy to determine sample size and statistical significance, it doesn’t take in to account (or at least not out of the box) whether the sample is reflecting dips and spikes relevant to your traffic sources, what day of the week it is (as it relates to sales trends) or who’s likely to be shopping at that time of year. By using features such as Optimizely Dynamic Customer Profiles combined with our data warehouse, we are able to be more selective in who we are testing as well as analyzing who engaged in what way with the test we are running to ensure we aren’t creating an unintentionally biased result.

In thinking this way, you create a solid framework for selecting your sample make-up. Before any experiment, I recommend asking yourself the following:

1. What are the different sources of traffic to your testing environment? This can be your list source in email or your traffic sources for web. Think about how these different sources impact the guests engagement with your brand. How would this influence their decisions?

2. How is your testing period representative of your business? Be sure to account not just for who is typically shopping on days of the week and at what times, but who is typically shopping in that time of the year as it relates to your business. Does your test give you an accurate sampling of that?

3. What are your segments and is this test intended to work for all of them or some of them? Does your sample reflect that?

By asking yourselves these questions and using what you find to select a representative sample and, of course, using a tool that gives you this flexibility of audience selection, you can more easily define the goals of your test, the time you need to run to reach significance and accurate representation while preparing yourself beforehand for any anomalies that may lead to a misreading of results.

If you’re interested in ways to visualize results, check out my previous post: Intro to Data Visualization.

Amazon Pricing Strategies for Building Brand Loyalty, Not Price Loyalty

When trying to harness the power of Amazon for your brand, the question of pricing is undoubtedly at the forefront of launching. With over 150.6 million mobile users and a trust score of 89%, Amazon unleashes a level of exposure and sales potential unlike any other in the retail environment. In a study completed by Statista (Links to an external site.) in 2019, it was reported 82% of Amazon buyers state pricing is an important factor of shopping on the platform.

The impressive numbers you don’t often see are the market share of products within a category (hint it’s very low for most sellers), the barrier for entry (very high depending on category) and the total fees (even higher) of selling a product on the platform. While lower pricing can win buy box and increase market share temporarily, it doesn’t necessarily translate to profitability and success of your brand. So, while pricing is undoubtedly a key factor to focus on, you may want to explore other ways to price besides competition-based pricing which often captures price-loyal customers as opposed to brand loyal customers. If you’re using Amazon right, you’ll be leveraging that brand loyalty off the platform as well.

In my time listing and optimizing products and brands on Amazon (Links to an external site.), I have identified some of the best ways to price and strategize your brand for profitable success on their channels. Here are some alternative pricing strategies that maintain brand integrity, optimize profit and act as true measures of brand loyalty as opposed to price-loyalty.

Dynamic Pricing Strategy

In a past life, I worked on setting up an Amazon vendor and seller central account for a reputable lingerie brand with several lines spanning across all demographics of intimate apparel (sexy, casual, plus, etc). Their core collection consisted of about 6 pieces in 4 evergreen colors and 2 seasonally rotated colors. As you can imagine, high season for lingerie is around Valentine’s Day and the Holidays (December).  By increasing price points surrounding key market moments, we made up in profit enough to strategically price lower during down time. This created a new baseline for off season sales and increased profit peaks during the holidays. Adopting a dynamic pricing strategy optimizes moments where a customer is willing to pay more while reducing price barriers to purchase the rest of year by allowing for lower price points that do not impact annual profitability.

High Low Pricing Strategy

This one has the potential to be highly effective or highly damaging and depends on where in the product life-cycle your product is. Take the case of a well-established beauty appliances brand that manufactured and sold premium haircare tools. They had over 2 million products in overstock but their brands identity still validated the high price point from the buyers perspective. By identifying the “stale” inventory that had drastically slowed down in sales velocity, we were able to list products at a significant reduction and reduce overstock by 60%! This pricing strategy relied heavily on the brand upkeeping their prestige price point across all platforms they were selling on. Consider this pricing approach with products which have lost their novelty or relevance in the market. Letting go of this inventory, even at a lower margin, frees up space for new inventory at a higher price point and a more effective use of your marketing resources.

Value Based Pricing

Value based pricing has become a niche within retail. eMarketer (Links to an external site.) predicted that as consumers prioritize Value over Marketing, “brandless” brands will surge. In looking to them and the trends, the move may very well be branding yourself as transparent in your pricing and focused on making quality products at an accessible price point. Aside from the customer perception, there’s the actual cost of creating a brand that has equity which can be transferred to your products perceived value. With the high costs on Amazon, value-based pricing and minimal branding can allow you to achieve the volume it takes to make the channel slightly more profitable as well as create a brand consumers trust, which can then be leveraged off Amazon. By focusing on product quality over brand image, you stand to create loyalty to a quality product at a reasonable price. While this strategy may take longer to accomplish, if you are listening to your customers and responding – you’ll stand a better chance of building true loyalty.

Premium Pricing Strategy

In recent years, Amazon has emphasized the need to build a brand and have supported this by adding new features such as Enhanced Brand Content and Brand Stores. A premium pricing strategy will allow you to focus your resources on creating a brand identity that translates into equity which validates higher pricing and an image that creates loyal customers. You should also take into consideration the cost that goes in to creating a brand with a perceived value as well as the time it takes to launch a brand. With higher costs, comes higher amazon fees but this gives you the opportunity to price high enough to be profitable. Similar to value based pricing, this may take more time, as it’s still reported low pricing is a high determining factor on Amazon, but the equity built through exposing your product on a high traffic platform can be transferred later on down the line to your own website and expanded product offering.

Leveraging the power of Amazon should not come at the price of your brand name, identity and integrity. If you look to list your products on their platform to gain access to their billions of shoppers, be sure you are considering alternative pricing strategies that do not rely on competing for customers with your price point. By establishing a price strategy that is aligned with your brand strategy, and focusing on maintaining your brand integrity you’ll be able to use the platform for brand awareness, providing fast reliable shipping for your guests and the strategically aligning your product with other key players in your category.