9 Actionable Marketing Tips To Improve ROI
Pricing is one of the core 4Ps of marketing. It’s integral to achieving your business objectives. For most businesses, this translates to profits, aka ROI.
Scared of dealing with numbers, many marketers, business executives and solopreneurs guess at the “perfect” price rather than ensuring their prices are aligned with the rest of their marketing. The problem is that social media and mobile have changed pricing and increased price transparency.
Many experienced marketers underestimate the availability and usefulness of arithmetic-free information to support their pricing decisions. To appreciate what’s needed, let’s examine the real-life example of a 30 year marketing veteran I know and respect who’s worked with high-profile brands. To expand the reach and generate revenues for his not-for-profit organization, my colleague partnered with a major university to create a fee-based course leveraging content that existed within his organization.
Since the content already existed, he was at a loss as to how to price the course and allowed the university to do it. He assumed that being in the course creation and sales business they were experienced at pricing new programs. As was their approach, however, the university used their one-size-fits-all price for the course.
On the face of it, this marketer’s decision appears logical. But what if I told you that the university didn’t consider the target audience and their needs? Further, the marketer understood this market because it was his NFP’s audience that he already knew and engaged with. Does his decision still seem sound?
While the pricing decision was easy-to-rationalize, it wasn’t necessarily the way to maximize reach or revenues. To help him, I recommended the following:
- Examine other educational or training options. Don’t just stick to other prices your organization has historically used. Look at alternatives such as other organization’s courses, especially those from industry associations, and other educational institutions. Also, do a few searches for related keywords since there’s the potential for new entrants into the market or free options.
- Incorporate a discount. This is a good way to test your audience’s interest and perception of your course. If it sells out at the lower price, you know that you have room to increase it.
- Offer time based pricing. This is another form of discount but its goal is to get people to act due to the deadline. Once you’ve determined a price range based on the competitive market, allow yourself some wiggle room by enticing prospects with a discount for paying early. This is a common practice for conferences and travel events. Register by a specific date and get a substantial discount. This has the advantage of letting you test how popular your offering is.
- Provide scholarships based on need. This ensures your offering is accessible to a wide audience. If you make this offer, you must be able to discount your pricing for a percentage of your prospects. One way to do this is to get a sponsor to fund this option.
When it comes to pricing, there’s not one perfect answer. You need to put a price out in the marketplace and see how your audience reacts to it. Understand that it’s easier to bring your price down than to increase it.
9 Actionable marketing tips (in the form of questions) to improve ROI
To ensure that your pricing is aligned with the rest of your marketing and more importantly your business, here are nine pricing questions you need to answer. Ideally, you should write down your answers to help you focus and analyze the results.
- What are your business goals? Since pricing is integral to the rest of your marketing mix and business, you must determine what your focus is. Do you want to maximize your reach, sales or profit?
- What product are you selling? This is one of the 4Ps and is critical to your pricing. Do you have a physical product, a service or an information offering? Is it a one-time purchase or can you sell more of the same product or related products?
- Who is your target audience? This is where a marketing persona is helpful to understand your potential market’s motivations and relationship to the purchase. Are they buyers, users and/or influencers?
- How does your brand influence your pricing? What does your branding say about your product price? Is your brand a premium priced offering or low priced?
- Where is your product offered? Place is an important element of the 4Ps. Do you sell your product online or via mobile? Does location make a difference in terms of your product availability?
- What type of promotion do you plan to use to support your product sales? Another of the marketing 4Ps. Do you have a budget to support your offering or do you leverage social media and content marketing?
- Who are your competitors and what are their offerings? This is an area where marketers tend to be myopic. They tend to focus on people selling the same thing in the same niche. Think about the products your audience can substitute. Also examine the potential for major players to enter the marketplace (such as Walmart, Amazon, Target, Apple, and eBay.)
- What are your business constraints? Assess where your business has weaknesses relative to other suppliers. Among the factors to consider are resources (especially human ones), supply, distributors and cash flow.
- What is your timing? This question refers to when you’re offering your product. Is there a seasonality to your product? Also, consider the age of your product (as in product life cycle).
Understand that no matter how you price your offering you need to continually assess and test it in the marketplace because how your target market views your product changes based on other options.
What have your biggest challenges been with pricing? What have you learned about pricing from your experience?
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Photo Credit: http://www.flickr.com/photos/willc2/4744676249/