The new frontier in online marketing
Nearly 90% of consumers begin their searches online, meaning that Google has evolved into the world's largest display window, where brands and retailers compete for optimal visibility and placement.
But securing a spot on Google's "shelf" requires a strategic approach, ensuring your products are relevant and competitively priced.
Price competitiveness is key
Increasing bids (Willingness to pay) can improve placement and drive revenue, but primarily boosts sales in proportion to marketing spend without necessarily enhancing cost-efficiency. Offering competitive prices (Product relevance) plays a crucial role; Google rewards lower prices with better placements and auction discounts, making products more likely to be clicked.
Ultimately, improving relevance through competitive pricing enhances your product's eligibility for clicks, leading to higher visibility and better overall performance. This creates a cycle where lower prices lead to more clicks, higher revenue, and improved cost efficiency.
The basket opener approach
Simply chasing the lowest price can lead to a detrimental "race to the bottom". Therefore, s360 advocates for a targeted digital pricing strategy. This smart pricing approach involves strategically lowering prices where it counts while protecting overall brand value.
One effective strategy is the "Basket Opener" approach. This involves identifying selected products that can drive traffic, command higher margins, and strengthen your market position. For these specific products, it pays to be competitive on price.
The goal is not to offer the lowest price on every product, but to pinpoint those items that truly serve as traffic drivers and profit multipliers.
Strategic pricing made possible with PriceShape
Adopting and managing a dynamic pricing strategy effectively requires powerful digital tools. Therefore, s360 relies on PriceShape. PriceShape provides essential insights, such as information on competitors' pricing.
It allows our clients to set up precise pricing rules to optimize their prices automatically without triggering price wars.
Used in partnership with s360's expertise, PriceShape helps our clients monitor competitor pricing and defend their optimal price position over time.
Basket Openers in Action
The basket opener products delivered extraordinary results compared to the control group:
~100 times higher revenue
7 times higher return on ad spend (ROAS)
18 times more ad clicks
14% lower CPC
5.7 times higher conversion rate
This case study clearly demonstrates how a targeted pricing strategy, powered by tools like PriceShape and implemented with s360's guidance, can dramatically enhance online marketing and e-commerce success.
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