In a world where promotions are everywhere, it’s easy to fall into the "always discount" trap. While discounts attract customers, it’s other factors that encourage them to return. On the web, chasing the lowest price can harm profitability, customer experience, and brand image. So, how can you stand out and offer an experience that meets consumer expectations while preserving your margins?
In this second episode, we explore the importance of not limiting your marketing mix to the price variable alone. We’ll discuss why exceptional customer experience and a differentiated offering are key levers for customer loyalty. Finally, we’ll delve into how artificial intelligence technologies, like Deep Learning, enable you to personalize the shopping experience by anticipating customer expectations and adjusting the offer in real-time.
Price is just another variable in your marketing mix
Price wars are difficult to sustain long term, particularly online where damage to margins, the customer experience and brand image can be costly.
Studies are unanimous: discounts and promotions lead to sales… but at what cost? Any distance selling brand will tell you that promotions can be a highly addictive drug, and consumers are quick to recognize which websites are running entirely on discounts. As with all drugs, it becomes harder and harder to feel the effects, so you have to increase the size and frequency of the dose in order to move up the sales figure.
We can all think of examples of sales which have ended up making consumers increasingly indifferent, because of overbidding, slashed prices and “private” sales which are less and less private. It’s evident that beyond the criterion of price there is a whole array of strategies that you can put in place in order to sell more.
Even if it is the price that initially attracts the customer, there are many other factors that make them come back. A mediocre experience will always leave behind a bad impression, even if the customer has paid a bit less for your product.
Improving the experience is quite straightforward and there are some clearly defined ways in which to avoid the “everything’s on sale” scenario.
One option is to become the leader in one particular market area. Amazon may no longer be the cheapest shop on the web, but its customer service is first class and its delivery times are unbeatable.
The other is to make your offering unique. Exclusive designs, brands and colours, new collaborations or the development of your own brands can all make price comparisons difficult. However, not everyone is Decathlon and this strategy is often the preserve of the biggest players in the market.
For the vast majority of online retailers, a deep understanding of customers, the careful selection of product ranges and complete mastery of the presentation of products are what makes the difference... On this last point, the implementation of the right artificial intelligence technologies, capable of individualising the online experience, is revolutionising how this can be achieved.
Until recently, this technology was seen more in the media than in real life. Now, however, it can be used easily to improve the performance and customer experience of online shopping sites.
Practical applications such as predicting customer expectations after a few interactions, measuring an individual’s responsiveness to a promotion, and presenting products which meet the commercial strategy of a business, are all possible thanks to this new type of specialized technology.
As an example, it is now becoming possible to present real-time product listings that are ranked by promotion price only if the algorithm has worked out that price is the individual’s main driver in their search.
Cheat-Code 2 : Use search to increase your margins
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