Losing Money With Your Volume Pricing Model? was originally published in February 2011.

If you’ve ever gone to a grocery store (I hope you have…), you’ve clearly seen the effect of volume pricing on your purchasing motivation. There are often drastic discounts offered to buy a larger package of ground beef, a case of soda or a larger tube of toothpaste. Why? Because the manufacturer is willing to take a lower per-unit price in order to move more quantity.

In the digital goods world, this business tactic is made all the more compelling because the cost of selling one additional unit is very low compared to physical goods. Producing and selling another license key for a piece of software or another virtual gift in an online community results in very little additional cost when compared to producing another package of beef, can of soda or tube of toothpaste. Because of this high profit margin, digital goods companies frequently offer their products in volume.

However, did you know that there are different methods for calculating volume discount prices — and they each have different financial effects? We’ve identified three different volume pricing models for digital goods to help you evaluate your current strategy and make sure it is working for you.

1. All-Units

The first pricing model we’re going to talk about is the very common “all units” model. In this model, the price of each unit is equal to the unit price for the cheapest volume tier reached. The following table illustrates a typical all units volume pricing model:

This graphic demonstrates what the per-unit cost is as the customer selects a higher volume:

As you can see from the graphic, the price per unit depends on the number of units the customer chooses to buy. If the customer selects two, each unit costs $80. If the customer selects 8, each unit costs $70. On first blush, the pricing model seems logical. The more that the customer buys, the cheaper the per-unit price become. However, there are a few quirks that become apparent when looking at the total cost compared to the number of units:

As you can see, the total cost drops between buying nine and 10 units as well as between 19 and 20. You may decide that enticing the customer to buy 10 instead of nine is exactly the behavior that you want, but it actually results in you making less money. Who really wants that? One solution to this problem (if you want to stick with the simplicity of the all-units pricing model) is to narrow the discount gap between units. By instituting a smaller difference between the per-unit price levels, this step down will narrow and can even reverse to have no drop at a higher number of units.

Advantages:

• The all units model is easy for customers to understand.
• Assuming a price is set in the displayed currency, you can always show customers a marketing-friendly per-unit price.

Disadvantages:

• The per-unit price is lower than the per-unit price when offering an incremental discount (see incremental model), hence the total price is also lower. So you may make less money by using this model.

2. Incremental Model

Another way to utilize volume pricing is the incremental model, which applies a discount only to units ordered above a specific price tier. We’ll use the same pricing model as before:

The following graphic shows the price per unit for each total up to 25:

As you might expect, if one unit is chosen, the cost is merely the price tier for one, or $100. However, if the customer selects two units, the first unit costs $100 while the second unit costs $80. This results in a total cost of $180 for two units, or $90 per unit. Similarly, if a customer selects five units, this is one unit at $100, three units at $80 and one unit at $70, for a total of $410 and a per-unit cost of $82. The incremental volume pricing model, unlike the all-units volume pricing model, does not experience any step function drops in total price as more units are selected, as you can see in the following graphic:

This model results in a nice smooth graph of ever increasing values, which means no tricky step-down points. However, the explanation of what the price is for each unit is not as simple as the all units discount. Keep this in mind if you choose this model.

Advantages:

• There are no step-down points. So, you won’t run into a situation where you are selling more, but actually taking in less revenue (like in the all units model).

Disadvantages:

• The pricing logic is more difficult for customers to understand than the all-units model.
• The per-unit price displayed to customers will often not be a marketing-friendly price.

3. Package Pricing

The third volume pricing option is the package pricing model. In this more complex model, customers buy packages of units at a fixed price. Assuming the volume price breaks used previously, the following table lists the total price for each specified quantity, like two units at $80 per unit equals $160, or ten units at $50 per unit equals $500.

The tricky part of this model is if a customer wants a quantity that does not match one of the pre-defined packages. In this case, the unit price is based on the most favorable package combination. For example, if a customer wants 15 units, a package of 10 for $500 and a packages of five for $350 results in a total cost of $850. As you can see in the following graphic, the package pricing combination results in a non-standard pricing structure per unit.

Looking closely at the graphic, it becomes apparent that the best per-unit prices are at the fixed package levels. When the total price is plotted against the quantity purchased, the chart looks similar to the All-Units chart:

There is a step-function down at the fixed package amounts. One impact of this fact is that customers may increase or decrease their purchases to reach specific packages. Atlas.ti provides a good example of this type of pricing model.

Advantages:

• Like all of the volume pricing models, package pricing entices customers to buy larger bulk to receive a better discount.

Disadvantages:

• It can be difficult to explain to customers.
• This model may result in customers decreasing unit purchases in order to fit specific package.

Model Comparison

The following charts shows a comparison of each model compared to the others based on per-unit price and total price.

When should you use one model over another? How do you decide which to use?

One way to select which model to use it to look at the average quantity per order. At a smaller order quantity, the unit price using any model is pretty similar, but as the unit quantities grow, the incremental model maintains higher unit prices. For every price break, the difference in price between the models grow larger.

Consider the limits of your existing shopping cart display if you are considering using one of the more complicated volume pricing models (incremental or package pricing). It is very important for a customer to easily understand your discounting method. If the cart display cannot clearly break down the discounting thresholds and price points, you will be far less likely to sell multi-quantity orders.

Keystone

Take a good look at the pros and cons of the different volume pricing models so you can choose the one that truly works best for your customer base and the product(s) you’re selling.

Does your company use volume pricing and if so what is your volume pricing strategy? Are there any other volume pricing models that you have seen?

The post Losing Money With Your Volume Pricing Model? appeared first on cleverbridge.

As a digital merchant, you know your product is valuable to customers around the world. But you can’t just set up shop in a new market and expect overnight success.

To increase your global revenue, you must have an in-depth understanding of exactly how customer preferences vary from place to place. Then use that understanding to design unique shopping experiences for your customers across the globe.

Now, localization entails more than just translation. A true localized shopping experience depends on things like:

• Speaking your customer’s language
• Letting them pay how they want
• Setting the right price
• Designing for usability
• Displaying tax for optimal conversions

Let’s dive into each one, shall we?

Speaking your customer’s language

Truly localize your content by using words that make sense to your readers and puts them at ease when making a purchase. For example, in your U.S. store, the word for where a shopper’s products are kept is called the cart. The preferred nomenclature in Great Britain, however, is bag.

From a tactical perspective, avoid making assumptions about which language to display to your customers based solely on their geolocation. Instead, rely on the preferences customers select in the browser. Use those preferences to deliver the right customer experience for sign-up pages, marketing emails, customer account sections and in-app messages.

Letting your customers pay how they want

Letting your customers pay how they want involves two elements: currency and payment method.

Localizing currencies

If someone in the U.S. were to walk into a brick-and-mortar store and see items marked for sale in euros or Japanese yen, there is a good chance they would walk right out of the store without buying a thing—it’s too confusing and not worth the hassle.

The situation is the same when shopping online. Consumers do not want to see product prices displayed in an unfamiliar currency. Show pricing in currencies that are relevant for the customers in that country.

Localizing payment methods

Know which payment methods are the most popular and make sure you offer them. Always keep an eye on the latest trends in the markets you serve, and add payment methods accordingly.

Do your research, because what is typical to you as a consumer in your home country may be a barrier to conversion for someone buying online on the other side of the world.

For example, most Americans use credit cards for ecommerce purchases. However, the situation is very different across European countries. In Germany, customers tend to use PayPal, wire transfers and direct debit payments more than they use credit cards. In the Netherlands, the vast majority of shoppers avoid using credit cards and prefer to use the local iDEAL system. Your carts must support your shoppers’ payment preferences in order to convert them effectively.

Setting the right price

Dig deep into fluctuating exchange rates and local purchasing power to determine how to price your products.

Just because U.S. customers will purchase your product for $50 does not mean that someone from India or China will too. A $50 product (converted to local currencies, of course) is probably unreasonable in these areas considering that the average income per person is well below what it is in the U.S.

If you are a merchant located in a market with a strong currency you might have to drop your prices in other markets just to stay competitive. It may result in lower revenue than you would like, but it goes a long way in improving conversion rates and decreasing piracy for your products in countries that cannot afford to pay your typical asking price.

Conversely, if you are a merchant located in a country with a weak currency, you might consider raising your prices for markets that can bear to pay a little more. If you don’t do this, you may be perceived as offering a lower quality product that consumers won’t trust.

The key is to determine the purchasing power equivalence of your global visitors to help you understand the relative value of a currency. Don’t forget to research how your competitors price their products in your target markets.

Designing for usability

Know what successful design looks like in the countries you are trying to reach.

For example, in English language homepages, you’ll often notice a heavy emphasis on the search field, few featured images and a minimal amount of text.

In other regions like Japan, one sees many more links, a lot of text and less emphasis on the search options.

To ensure that you’re assuring customers with proper presentation, research the most popular websites in the countries you are interested in, and have native industry experts help design your site if possible.

Displaying Tax for Optimal Conversions

Although ecommerce removes many barriers to global selling, there are challenges that occur no matter how you sell your product. One of the most important issues is calculating, collecting and remitting sales and/or consumption taxes when required by the laws of the countries you are selling in. Compliance is achieved by consulting your own legal advisors, so don’t take this as legal advice.

However, we do know a thing about optimizing conversion rates by localizing the way you display the tax on the sale.

In the U.S., sales tax is added to the advertised price. Customers who go to a brick-and-mortar store and see a price of $79 know they will ultimately pay more than that. In Chicago, Illinois, the sales tax is 10.25 percent, which means that the tax on a $79 product is $8.20 So, on a website, the product would be advertised for a price of $79. However, once the customer enters the shopping cart, the tax is displayed and added to the price, resulting in $88.19. This is how U.S. customers are used to seeing prices, so this is how they expect it will be displayed in the cart.

In the European Union, however, Value Added Tax (VAT) is a tax on the perceived value of a product and is marketed as a component of the final price. European customers who see an advertised price of €79 expect to pay exactly €79 at checkout. Usually, an additional note on the marketed price indicates how much of that price is actually the VAT.

As you can see, it is important to be aware of not only what the tax rate is for a country when selling globally, but also how to present it to customers. Make sure your store supports these important details and are easy to implement. They make a huge difference in conversion rates.

Keystone

Once you’ve successfully localized your ecommerce, you’ve got to stay on top of it. You should continue to monitor your regional traffic and conversion rates, test different layouts for conversion rate optimization, and always research new payment methods. Localization never ends.

For a deeper dive into localization, check out our 7 Tips for Growing Your Global Subscriber Base.

The post Localization 101 — Five Elements to Optimize Conversion Rates appeared first on cleverbridge.

Getting Customer Loyalty Programs Wrong Is Damaging

Setting up a customer loyalty program might seem simple, but getting it right is important. Starbucks recently changed the way customers can earn points in their loyalty program, which caused some ire in their customer base. Unlike in days of yore, customers can now take to social media to voice their complaints, which magnifies whatever dissatisfaction Starbucks generated with their change.

Today’s infographic from Experian takes a detailed look at launching a customer loyalty program, beginning by asking if a loyalty program is right for your business. They conclude that a loyalty program is good for any company that seeks repeat business from customers over time. Though a bad fit for the construction industry or appliance repair, customer loyalty programs are perfect for restaurants, airlines, pharmacies and businesses that rely on repeat customers. The same applies to online businesses that wish to build and deepen their brands’ relationships with customers.

Getting Customer Loyalty Programs Right Means Enormous Benefits

The infographic notes that, “You can’t just call something a loyalty program, set it in motion and expect it to work … Careful planning, research, and preparation are necessary, and if done right, your business could reap enormous benefits.”

Experian lists four enormous benefits of running a successful loyalty program:

• Inspire customer loyalty
• Strengthen customer retention
• Deepen customer engagement
• Gather essential customer data

Launching and Maintaining Customer Loyalty Programs

If you have established that customer loyalty programs are right for you, and you have a plan that ensures a return on your investment in terms of both increased customer loyalty and increased revenue, then you’re ready to launch your program. Here’s where you work to get the word out about your program. Remember, communicating the value to customers is not only essential to the success of your program, it’s also yet another touchpoint to continue to grow the customer relationship.

Maintaining your program once it’s launched takes attention too. Don’t miss the very end of the infographic for tips on keeping your program fresh and exciting so customers stay engaged.

Download our complimentary guide on Retaining Subscribers and Optimizing the Renewal Process today

The post Ecommerce Eye Candy — Launching Customer Loyalty Programs [Infographic] appeared first on cleverbridge.

You might think our shop keeper friend is putting himself at a disadvantage with his blindfold. Yet this same scenario plays out every day in countless online stores. The standard set of analytic tools most websites use provide only part of the picture.

Website Analytics: The Blindfold Basics

Most websites employ analytics to track activity on their site. The basic analytics toolbox allows you to see which pages customers visit on your site. Additional features allow site owners to use pageview data to optimize their site, which we discuss below. In each of these cases, however, the site owner remains blindfolded to whatever user activity happens while a customer is on a webpage.

Pageviews

Tracking pageviews is the most basic way to analyze your site. Connecting a tool like Google Analytics to your site allows you to see what pages your users are landing on and viewing. You can also see additional demographic information based on user location, web browser and device information.

Goals

Analytics tools also allow you to track goals by defining desired outcomes and tracking your achievement. You have a goal of signing up customers for a newsletter. In the registration process, you display a confirmation page after a customer signs up. When the user views the confirmation page, your analytics will show a goal completion. Combining goal tracking with pageviews shows the visitor flow across different pages on your site: where they land, where they go next and where they drop off. A well designed set of goals optimizes customer engagement on your site.

Ecommerce

If you sell online, your ecommerce data show how many sales you have made, what your revenue is, etc. Including ecommerce in your goal tracking ties pageviews to revenue. Like our shop keep in his blindfold, you can hear the customer enter your store and you can hear the cash register ring them up. But you are still oblivious to customer behavior inside the store — data which can be used to optimize customer engagement and revenue even more.

Removing the Blindfold With Event Tracking

Event tracking codes can be embedded into almost any element on a webpage. This includes, but is certainly not limited to:

• Clicking on page elements (e.g., buttons)
• Adding or removing products from the shopping cart
• Viewing recommendations, user reviews or additional information in the cart
• Downloading free trials
• Opening invoice files
• Entering coupon codes
• Viewing specific elements (e.g., a don’t-leave-layer)
• And more …

Keystone

Basic analytics provide you only so much data. Including event tracking codes on your site is like removing the blindfold from the shop keeper’s eyes. You no longer have to rely on a turnstile tally of how many users landed on your pages, because you can observe every action your customers take inside the page.

The post Remove the Blindfold With Advanced Analytics appeared first on cleverbridge.

Customers learn about a company not only through the quality of their product, but also through the quality of their support, the user interface, and the overall customer experience. We can learn a lot about how customer-centric a company is by the nature of the user account they offer their customers.

This shift in how customers assess a company mirrors a shift in how companies must think of their customer relationships. Selling a connected device means having connected customers. They do not disappear after they make their purchase and neither can the company that sold them the device. Adjusting to a longer-term customer relationship, companies are able to spread the price of their product and services out over time. This gives companies greater flexibility in pricing options and more choice for customers. From a company’s pricing strategy, we can see whether they are committed to building customer relationships for the long haul.

Below, we examine two similar connected devices, the process for creating a user account, and the pricing strategies the companies employ. Use this analysis to look at how your own business handles user accounts and pricing strategies in a new light. Are you just trying to move a product, or are you using that product to forge lasting customer relationships?

A Tale of Two Cameras

We looked at remote cameras primarily marketed to consumers who are interested in managing home security or monitoring child care. One company, NETGEAR, may be familiar to customers. NETGEAR was founded 20 years ago and is best known for, unsurprisingly, network gear meant for both home and business use. Their home video system is called Arlo.

Arlo offers the ability to monitor video via a smartphone app and has features like night vision and motion alerts.

The other company we looked at was Nest. Nest was founded in 2010, and acquired by Alphabet (née Google) in 2014. Their breakout product was the Nest Learning Thermostat, which allowed users to better manage their home energy use.

Nest’s home camera product, Nest Cam, has roughly the same bells and whistles as the Arlo system, including remote monitoring via a mobile app, activity alerts, night vision, etc.

We chose these companies because their camera products are largely comparable, but their parent companies represent different epochs in the Internet age. While NETGEAR emerged from the first commercial Internet boom in the 1990s, Nest was forged in a world after smartphones, omnichannel shopping, and the hyperadopting customer. We wanted to see how these differences influence the customer experience.

Who Is a Customer?

In exploring these products’ sites, we were struck by an immediate distinction.

A customer can access an existing user account on NETGEAR’s Arlo site. They could also set up a new system after purchase. But that is the only way to create a user account online for the Arlo system.

NETGEAR sends a clear message to consumers with this configuration: Access to the Arlo community is only allowed for buyers of their physical products. Given their background as producer of physical goods first, it is not surprising to see NETGEAR approach the question of who is a customer differently than Nest.

As you can see from the image below, Nest’s user account login page includes an option to sign up for an account even without having purchased a product.

Nest betrays their post-omnichannel pedigree by having this option available. A company that understands they are selling membership into a brand or ecosystem of products knows that closing a sale on a product is not the only measure of success. In fact, reinforcing customer loyalty, propagating special promotions and learning about customer behavior and preferences (all traditional marketing functions) could be channeled directly to users via their user account.

Once registered, instead of dropping the user into the thick of product setup, Nest thanks the user for joining and lets them decide what they would like to do next.

While the Arlo focuses on providing direct utility only to paying customers, Nest takes the opportunity to help grow and foster their relationship with anyone interested in the brand. The customers who are attracted to NETGEAR’s model have purchased a product that has a website to support it. Nest customers have joined a connected community that is supported by smart, connected devices.

IoT and Monetizing Customer Relationships

A major differentiator for a connected video system is how the companies provide access to cloud storage for the video content a customer will now be creating.

For every model and configuration of the Arlo system, a customer has only one option.

Customers are not able to purchase more storage, nor is there any way for Arlo to continue to support the costs of maintaining their cloud video storage system with ongoing fees. So while customers continue to derive value from that service, the only way NETGEAR can increase their revenue is to sell more hardware.

Not surprisingly, Nest takes a different approach. The Nest Cam may be purchased without purchasing the additional cloud storage subscription, which they call Nest Aware. But even the “Nest Cam only” option comes with a free 30-day trial of the lowest tier Nest Aware plan.

Nest here shows a much better understanding of the modern omnichannel shopper. In order to reduce the risk for their customers trying out the Nest Aware program, they offer it for free — but not forever. They know they can provide value that customers will be willing to pay for once they try it. They also know that some customers may demand different storage options or billing models, so Nest makes available different tiers of coverage, each with monthly or annual subscription options.

Keystone

From entry into the brand community, to providing real value in additional connected services and creating a monetization strategy that allows the business to scale with customer demand, the companies that will benefit most from IoT will be the ones who place emphasis on customer experience and choice. Simply selling connected devices without an updated customer engagement strategy will not only leave your company gasping for recurring revenue, but may also turn off customers who today demand a far greater level of access and control.

Download our complementary guide, Attracting and Acquiring New Subscribers, today.

The post IoT: A Tale of Two Connected Devices appeared first on cleverbridge.

The creation of the World Wide Web and the launch of the online shopping experience helped usher in the first hyperadoption craze. Do you remember your first introduction to the Internet? Recall realizing the ease and efficiency of shopping online for what you needed compared with visiting a brick-and-mortar store. Suddenly, consumers had more at their fingertips. In the last couple of decades alone, thousands of innovations have been successfully launched thanks to hyperadoption, and millions of users of services like Uber and Airbnb have signed up.

Why Do Customers Hyperadopt?

Many tech crazes, like wearable devices, have emerged over the years. What encourages consumers to adopt new technologies so quickly? Forrester has determined that there are two psychological reasons why hyperadoption occurs. First, adopting new things no longer costs as much as it did in the past. Second, today marketers can offer benefits that easily overcome any loss aversion. All this hyperadoption means that in the years to come, connectivity, cloud architecture, big data analytics and artificial intelligence will influence how we:

• Protect and control our physical world
• Interact with technology
• Maintain our well-being
• Connect with each other

We can already see hints of this in the Internet of Things market.

Tips for Marketing Success

Though filled with promise, hyperadoption creates a challenge for marketers. It is an environment where consumers are so quick to try — and discard — new digital experiences. If a consumer fails to connect with your product, they will simply move on to the next thing. To compete in the face of this disruption, there are a few tactics that marketers can do to ensure that their brand survives the era of hyperadoption.

Tip 1: Reduce the risk of trying your product

It is possible to build experiences with your brand that are free or nearly free. When you decrease the cost, you naturally decrease the risk for consumers to try your product in terms of their investment of dollars, time and privacy. With the risk of trying your product reduced, consumption of your product increases. A great example of this is WhatsApp. By offering this service for free, this app has reduced the risk of trying it. When you reduce the risk of new behaviors for customers, they lose less with a negative outcome and gain more from a positive outcome. This increases consumer interest and adoption, creating a network effect that fuels hyperadoption.

Tip 2: Focus on doing only one thing very well

Positioning your brand to do too many things well makes it difficult for customers to perceive your brand’s value, and it puts cognitive stress on the consumer. Airbnb, for example, has found success enabling anyone with a spare mattress or room to run their own bed and breakfast. YouTube receives more views than any traditional TV channel. And there is Wikipedia, which has created the world’s largest repository of knowledge. Each of these companies has succeeded by focusing on their differentiator and building out one key piece of functionality well. Simply adding new features doesn’t increase value and make a product more appealing; it adds complexity to your message and the user experience.

Tip 3: Continually add value and new experiences

According to Forrester, one challenge for marketers today is the fact that consumers connect less emotionally to new products. In the past, adoption decisions happened after thoughtful consideration (i.e. read reviews, discussed with friends, viewed a demo, etc.), and then consumers discovered the value and developed an emotional connection. Consumers use less of these channels now when making adoption decisions, meaning less emotional energy is used. But creating a product/service ecosystem is one way to create value and retain customers. Consider the ecosystem that both Apple and Nest have created within their product line. Once you purchase a product within the Nest ecosystem (say, the connected thermostat) and connect it with another Nest product, you create an ecosystem of connected devices that add even more value through their connectivity.

Tip 4: Take caution — hyperadoption can lead to hyperabandonment

No matter how consistently your brand delivers value and positive new experiences to your customers, hyperabandonment—fleeing a brand as quickly as joined—is a possibility. High rates of abandonment are evidence that consumers are willing to try new low-cost experiences without buyer’s remorse. For example, consumers lose interest in apps and barely use the majority they have downloaded. How can you keep this fast-moving group connected with your brand? Use speed and responsiveness to stay ahead of their needs and expectations. Continually reacquire your audience’s attention by responding to their needs and rapidly adding to the product experience, and become hyper-responsive to invite your customers to experience these new outcomes.

Keystone

The era of hyperadoption is here and is something all marketers need to embrace. Consumers will be offered an unprecedented number of exciting, interesting and useful products and services, many at little to no cost. And brands will be challenged to maintain relevancy with giving customers what they want in a world of stiff competition. Marketers who anticipate and strategize on the outcomes consumers demand of their brand will survive (and thrive) in this new era.

In the era of hyperadoption, attracting and acquiring new subscribers is more important than ever. Download our complimentary guide today.

Andrea Bailif-Gush is the Product Marketing Manager at cleverbridge

The post Four Tips for Marketing Success in the Era of Hyperadoption appeared first on cleverbridge.

For our favorite posts and infographics of 2014, click here and here.

Email Marketing

Publishers Struggle With Email Marketing Basics | eMarketer
If you create content to promote your brand, then you are a publisher. In some form or another, this definition places most online businesses in the publisher category. Email marketing is good for promoting your content, driving revenue and improving brand awareness. But it’s not always so easy to be successful. According to eMarketer, the top challenges for email marketers are:

• List growth
• Personalization
• List maintenance
• Mobile optimization
• Analytics
• Segmentation

These challenges are interdependent: Without segmentation and list maintenance you’re not going to have good analytics, and without mobile optimization you’re not going to be able to personalize content. If list growth is your biggest challenge you definitely want to focus on your plans for creating content and distributing it.

Pricing Strategy

There’s no Such Thing as One Right Price in Retail | Econsultancy

Your pricing strategy determines your income, and so, has the ability to vitalize or kill your business. This post on Econsultancy stresses that B2C companies should know how to maximize revenue through dynamic pricing, which is a way for retail businesses to automatically display different prices for different consumers at different times.

Localization

Don’t Get Lost In Translation: How To Conduct Website Localization | Smashing Magazine

We have long encouraged those who sell software online to consider the impact of global expansion on their bottom line. Of course, if you decide to enter new markets, then you must adapt your checkout process (including text, prices, currencies, payment methods and form fields) to that new market. This post gives an excellent overview of the ins-and-outs of doing so.

Affiliate Marketing

Five Simple Tactics to Boost Last Minute Christmas Sales in Affiliate Marketing | PerformanceIN

While it’s too late to cash in on these suggestions this year, now is the time to start thinking how you can take advantage of all the ecommerce bonanzas that are sure to abound next year. This post examines how ecommerce marketers can work with their affiliates not only to plan for year-end success, but can also change their marketing approach based on useful reporting. Our audience will be especially interested in the subheading “Go digital.”

Sales Tax

Could the Sales Tax Loophole Debate Revive Over Alibaba? | RetailDive

This is a new blog that I came across through an email I received from a LinkedIn group chat discussion. We’ve been covering the sales tax issue for several years now, and the story is quite compelling: A victim-turned-oppressor in the form of Amazon first fighting to keep online shopping tax free and then turning its back on less dominant comrades. Of course, now the battle of giants is occurring between Amazon and Alibaba who has taken on the role previously held by Amazon.

Well, that’s it for 2014. We hope you had a successful year that yielded a bounty of conversions, high average order values, and increased profits, and we hope that we had a small part in helping you accomplish that success. All the best in 2015. See you next year!

The post December Ecommerce Digest appeared first on cleverbridge.

Cart Abandonment

Cart abandonment is a major concern for software merchants. Generally speaking, more people than not abandon their online shopping cart after choosing a product and putting it into the cart. In fact, according to the Baymard Institute, an independent web usability research institute, the average documented online shopping cart abandonment rate is 67.91 percent – that’s more than two-thirds of visitors!

Conversion Rate Optimization

There are a number of ways to combat cart abandonment, also known as shopping cart and conversion rate optimization. Changing the parts of your shopping cart and seeing which configurations perform best through split tests can have an enormous impact on how much revenue your ecommerce generates.

Pricing Strategies and Profit Margins

One very important element in your shopping cart is the product price. The display of your price is very influential. Now, of course, you don’t want to drive down your cart abandonment rate by sacrificing your profit. That’s just foolish. But sometimes, lowering your prices for a limited time helps convert new customers, who eventually become long-term loyal customers. And sometimes, raising your prices makes your product more valuable in the eyes of some shoppers.

Check out this infographic which explains that improving profit margins is top of mind for pricing strategists and identifies the major challenges of pricing strategies. It concludes with five suggestions that businesses can use to increase their margins, including a dynamic pricing strategy.

Ever experienced pricing strategy challenges and worked to overcome them? Tell us about it in the comment section below.

The post Ecommerce Eye Candy – Pricing Strategies and Profit Margins [Infographic] appeared first on cleverbridge.

The price of your product is an essential part of your business. If the price is too high, people won’t buy it; if it’s too low, you’re leaving money on the table.

So if you’re unhappy with the conversion rates for your checkout process and shopping cart, you might consider a deeper look into how you price your product.

But what are some of our industry’s best practices for improving your pricing strategy?

Five Quick Tips

• 

  The first tip is to use psychologically attractive prices to persuade visitors to convert. Keep your prices clean – no one wants to see a product priced at $47.54.

• Secondly, be flexible. Use split testing tools to offer customers different price points and monitor which ones perform best.

• Next, use customized pricing for overseas customers. It’s important that you don’t dissuade customers in other countries from completing a purchase, so don’t use a fluctuating exchange rate to price products in foreign currencies. Doing that will inevitably cause your shopping cart to display “ugly” prices (as in Figure 1).

• 

  Our fourth pricing strategy tip is to offer discounts. Displaying two prices (as in Figure 2) – a higher, slashed-out price and a lower discounted price below it can persuade hesitant customers to convert. If you’re offering a discount to only a certain segment of your customers, those on your email list for example, it’s crucial to protect your URLs. Otherwise, those prices can scatter across the Internet and decrease your expected revenues.

• Lastly, drive volume with volume pricing – this strategy sweetens the deal for customers buying bulk. As the white paper explains there are many ways to skin this cat, so investigate all your options fully before settling on one. And don’t be afraid to change horses in midstream.

Get this complimentary white paper for straightforward pricing strategies in a global marketplace.

The post Five Quick Tips for Ecommerce Pricing Strategies [White Paper] appeared first on cleverbridge.

We also featured two posts on affiliate marketing: The first was an introduction to affiliate marketing and the other was an in depth panel discussion on European affiliate programs.

Additionally, we taught email marketers about the importance of render testing your emails on different webmail clients and browsers.

This month’s Ecommerce Digest focuses on  topics like:

• How to implement quick and easy user testing for your product
• Benchmarking the amount of affiliate sites a buyer visits before purchasing a product
• Understanding the SEO impact of Google’s new search algorithm Hummingbird
• The challenges of creating a viable pricing strategy

Quick and Dirty Usability Testing | Creative Bloq

This post helps product developers answer important questions like, “Can people use my product in the way I intend it to be used?” and “Is my information hierarchy understandable to users?”

Not only does this post give good guidelines for user testing your product on the fly, it also gives ecommerce pros links to some helpful online testing tools.

Based on the above observations, it would be safe to conclude that anywhere between 15% and 25% of affiliate transactions involve more than one publisher in the click stream to conversion. – Affiliate Marketing Blog

Up to 25 Percent of Affiliate Transactions Involve Multiple Publishers | Affiliate Marketing Blog

This post contains important data from major affiliate networks and platforms. Affiliate marketer, Geno Prussakov, crowd-sourced his colleagues to determine a benchmark for how many different affiliate sites a buyer might visit before purchasing a product.

Of course, the number of sites a buyer visits before purchase depends on what kind of product and what kind of site the person is searching for. This post also addresses the difficulty multiple devices play in tracking these numbers.

Google’s Little Hummingbird Can Tell You More | Search | Ecommerce Times

Every single online merchants needs to solve some kind of SEO challenge. It might be optimizing search results to help customers find your product. Or maybe it’s helping them contact your customer service department. No matter which part of the ecommerce puzzle you are trying to solve, search is a key component in getting your customers where they want to be.

Google’s new search algorithm Hummingbird helps pave the way for better search results for longer queries. This search update also promises to deliver more relevant results for queries made by people using voice recognition software to search the Internet from their mobile devices.

Pricing Underpins Everything You Do | A List Apart

The right pricing strategy can make or break a business. But the price of a product must be affordable to buyers and profitable to sellers.  However, pricing becomes a more complex challenge when you are selling highly customized solutions that require a close ongoing relationship between buyer and seller.

The author tells an engaging story about the difficulties of developing a pricing strategy for these types of services versus a more ready-to-wear solution. Like all great stories it gives us  a valuable lesson learned from trial by fire.

Get our complimentary cleverbridge white paper to see if you have the capabilities you need to maximize online sales.

The post September Ecommerce Digest appeared first on cleverbridge.