How to present the price of an offer in Email Marketing.

One of the fundamental tasks in marketing is to implement an appropriate pricing strategy. Within the discipline of pricing, Communication is one of the aspects on which email marketing professionals can make the greatest contribution. This is due to the very nature of the channel, which is direct, interactive and traceable. In this context, in this post we have gathered some ideas that we have taken from the book The Strategy and Tactics of Pricing: A Guide to Growing More ProfitablyThe book, a reference book in the field of pricing, and that can be applied to email marketing campaigns.

Idea 1. Relative cost of search and search goods.
The relative search cost refers to the financial and non-financial costs, relative to the purchase price, that a buyer has to incur in order to determine the differences in functionalities and benefits between different purchase alternatives. Here, the amount of the purchase is critical. For example, spending 10 minutes comparing two products worth €5 may be an excessive relative search cost, but spending 2 hours comparing two products worth €5,000 seems reasonable. The "search goods"are those where we incur a search process (with its associated relative cost) and where we can determine the differences between two or more alternatives prior to purchase without incurring a high relative search cost. It is the paradigm of goods we can buy online.. In this type of product, price communication should be directly related to the functionalities of the product and the benefits it will bring to the user.. Examples of these items are consumer electronics products (laptops, digital cameras), cosmetic products and some financial products for example. Below we see the price communication of a search good from the hand of K-tuin.
 

Idea No. 2. Experience goods
A second type of product is the so-called experience goods. The relative search cost in these cases is higher, as these are goods where the differences between functionalities and benefits are not obvious and require a longer period of testing and analysis. Examples of experience goods would be consulting services, professional software or education. In these cases, rather than explicitly linking price communication to the product's functionalities and benefits, the aim will be to minimise the buyer's perceived risk and maximise the communication of potential benefits. In this sense, some of the resources to reduce the levels of uncertainty of the buyer can be to resort to a prestigious partner, to an expert, to establish a high price that transmits quality and guarantee, to include guarantees of reimbursement of the amount paid, or to offer trial periods, as we see in the example of Lynda.com.

 
Idea 3. Proportional price evaluation
Consumers tend to value the price of a good proportionally rather than absolutely. This is especially true when we evaluate price differences between similar products. In one study, a group of consumers was asked how many would be willing to travel a greater distance to a shop to compare the same product instead of $15 for $10, thus saving $5 on the purchase. A total of 68% of the participants answered in the affirmative. Another group of people were asked the same question but with a different number. They were asked if they would be willing to travel a longer distance to a shop to compare the same product instead of $125 for $120, thus also saving $5 on the purchase. In this case 29% responded in the affirmative. The higher proportion of savings (5 is 33% out of 15) motivates more than a lower proportion of savings (5 is 4% out of 125). This principle has also been used to explain studies showing why we spontaneously tend to prefer a 100% saving on financing costs if we are going to buy a new car, to a 5% saving on the final price of €20,000, even though in absolute values the amount is higher in the latter case. This is called the Weber-Fechner effect: price perception depends on percentages, not on the absolute difference. In the NH example, we see how they support this effect by resorting to the "free breakfast". In this case, we perceive a 100% discount on the good, although in absolute values it may be less than a discount on the room reservation.

 
Idea No. 4. Reference prices
A reference price is the price that a buyer considers reasonable and fair to pay for a good. With this in mind, we can use reference prices to, for example, increase sales of a lower priced product. Thus, we can relate the price of a product to a more expensive one, which will be taken as a reference and will make the perception of the price of the first one more positive. Another type of relationship that is often used is of the type "before €100, now €90", as we see in the example of Vertbaudet.