On today’s episode, Kunle is joined by Brecker Brees Co-Founder at Pricestack, a customer data intelligence platform specialising in working with Shopify merchants.

All too often eCommerce merchants and DTC business owners don’t have a “real” pricing strategy. They set prices based on competitor research and plain old gut feel. This might work at times but more often than not, you’ll be leaving money on the table.

This is not just applicable to product pricing, but also to your discount and bundling strategy. Which product to discount, how much to discount and when to offer that discount could make or break your profits. This is where data driven optimisation comes in.

In this episode, Kunle and Brecker talk about leveraging economic principles and data to optimise your pricing strategies. You will get to hear about the importance of finding equilibrium in pricing across all your products, building the right product bundles and leveling up your discount offers . This is a great episode for anyone wanting to know more about the technical side of pricing!

Here is a summary of some of the most important points made,

• • Tinkering with price of certain products can sabotage cross-product demand of your store
  • There is a price point upto which buyers are willing to pay a premium
  • Price matching leads to a lose-lose situation
  • The right product bundles can 2x your AOV
  • Optimal discount strategies are built on analysing historical data and forecasts

Covered Topics:

On today’s interview Kunle and Brecker discuss,

• Importance of setting the right price
• Why price match is a lose-lose situation
• Preserving Cross-product demand
• Designing Bundles
• Discount Strategies

Timestamp:

• 05:00 – Meet Brecker:
  • Started Pricestack around 2 years ago
• 0550 – Why Price optimisation:
  • Qualified in economics
  • Latest economic research was not really being utilised in eCom
• 09:00 – Solving the pricing problem:
  • “Pricing is the most overlooked and underserved factor that determines sales”
  • People use old spreadsheets, competitor research and just gut feel
  • Using a data-driven approach to find the “best” price
  • Tinkering with price of certain products can sabotage cross-product demand of your store
• 12:10 – Why Price matching doesn’t work:
  • Do not price match
  • More effective to analyse behavioural data
  • “Price matching is a lose-lose”
  • There is a point upto which buyers are willing to pay a premium
• 17:30 – Finding Equilibrium across your store
• 22:40 – Working with Bundles:
  • Bundling products can squeeze out extra revenue
  • Many businesses wrongly assume that their customers are not interested in bundles
  • You can 2x AOV through using bundles
• 25:40 – Discount strategy:
  • Discount optimisation strategy is based on historical data and forecasts
  • Data tells which products should be considered for discounts and at what price
• 31:10 – Critical data points:
  • Demand trends
  • Taking context of your supply as well

Takeaways:

• Tinkering with price of certain products can sabotage cross-product demand of your store
• There is a price point upto which buyers are willing to pay a premium
• Price matching leads to a lose-lose situation
• The right product bundles can 2x your AOV

Links & Resources

• Price Stack website
• Brecker on LinkedIn

Tweetable Quotes:

“Price match is a lose-lose.”

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SPONSORS:

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