There are a number of elements that contribute to the success of a direct mail postcard – great design, problem-solving content, and mailing to the right audience at just the right time, to name a few – but how much thought have you put into the prices you’re charging? When it comes to punching up your pricing, getting a handle on how consumers respond to certain cost characteristics offers some fascinating insights into how you can improve the impact of your next direct mail offer.
Your Pricing Strategy
Struggling to find just the right pricing strategy is an ongoing challenge for many companies. You need to keep pace with the competition, but you also need to turn a profit. And in some industries, this can be an awfully fine line to walk. Prices that are too high or too low can:
- limit the growth of your business, and
- lead to trouble in the cash flow department
While you probably recognize that your profit lies somewhere between your costs and the prices you’re charging, what many businesses don’t fully understand is that:
The amount of that profit is largely defined by how much value your customers place on whatever it is that you’re selling.
The more your product or service is worth to them, the more your clients will be willing to pay for it. Figuring out who your clients are is the best way to understand the criteria they use in their purchasing decisions, and the benefits they’re looking to gain when they do decide to buy. Do they appreciate the fact that your product is always reliable, or that your service is fast and convenient? Or is it your competitive pricing that’s the main drive behind choosing to buy from you? Asking for and paying close attention to customer feedback plays a pivotal role in deciding how much you can charge.
Some of the other tactics you should make use of when putting together your pricing structure include:
- staying on top of competitors’ prices,
- introducing tiered pricing to further encourage those who buy from you regularly, and
- experimenting with various pricing tactics
Once you’ve landed on an effective approach, remember that the best pricing strategy should remain a work in progress. Be sure to review yours on a regular basis, and to tweak it as demand and profitability dictate.
Proven Pricing Techniques
Some of the best pricing techniques stem from studies in consumer psychology. Did you know for example that when a potential buyer is faced with too many choices in a given moment, that they’ll often opt out of the purchasing process entirely? It’s true! And when it comes to the art of selling, a single moment is often all you get to entice a customer to buy.
That’s one of the reasons why direct mail postcards are such effective marketing tools. When done right, a postcard captures your customer’s attention and gets your message across in a format that’s brief, compelling, and simple to understand. And by enhancing your message with a time-sensitive offer that’s also easy to act on, direct mail postcards give your mail-out audience the opportunity they need to focus on one important choice at a time: deciding to buy from you.
Here are a few simple but proven tips that can help you to fine-tune the price points on your next direct mail offering:
- When you know what you need to charge for your product or service, but your pricing isn’t quite as competitive as you’d like it to be, try taking advantage of a behavior known as anchoring. Market your item alongside an equally desirable but more expensive option, and your customers will tend to look more favorably on the value that’s offered by the lower-priced choice.
- Did you know that we tend to read the price $1,500.00 as “one-thousand-five-hundred”, and the price $1500 as “fifteen hundred”? More to the point, did you know that studies show the more syllables there are in a number, the higher we sense it to be? Just a little something to keep in mind when drafting the pricing copy for your next direct mail postcard.
- Breaking your subscription or membership fee down into a daily, weekly, or monthly amount is a proven way to sway the buying decision in your favor. This simple tactic makes your service seem less expensive to a potential customer than it would if you described it in terms of its annual rate.
- The number “9” continues to exert a powerful influence over buyers – one that’s far more effective than pricing that ends with any other number. Despite KNOWING that $999 is almost the same thing as $1000, our subconscious tends to PERCEIVE it as significantly less. Even when a similar product is selling for $990, consumers will opt for the price tag ending in a “9” as much as 25% more often!
Honesty is Still the Best Policy
Tips and tactics aside, it’s important that your business is always as upfront as possible about its pricing structure. Don’t be tempted to bury fees or hide extra charges in the hopes that customers will simply “buy now, and ask questions later.” Nobody likes to feel scammed. And thanks to the online world we live in, you can rightly assume that not only is every would-be client a well-educated consumer, they’re also ready, willing, and perfectly capable of letting others know exactly what they think about your less than honest approach to pricing.