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The Price Perception in Ecommerce

The essential core of successful ecommerce personalization is about offering genuine value to your customers. For customers to really appreciate that value, you must influence their perception on prices. This is a common marketing technique that is used throughout the service sector, such as bars using happy hours. The goal is to get customers to spend more money.

3 Factors That Influence Price Perception

It all boils down to perception. If a company is able to influence the perception that online shoppers have about prices so that they deem a price to be of good value, then the company can start to demand whatever prices they want.

If you want to increase the engagement with your personalized product recommendations, you must understand the factors that play a part in price perception. Even if your recommendations are on point, you need to convince customers that the price tag is worth it. Here are the three major factors that come into play:

1. Discounts and Promotions

You must decide if you want to undercut your competitors, your goal is to always aim for the cheapest price, or if you simply want to give your customers the best offer. This is closely linked with branding and how a company wants to position itself in the market. Ecommerce personalization is all about making the right offer to the right person at the right time. Doing this successfully through a timely promotion can be much better than being known as the cheapest option.

2. Value for Money

Being too cheap can count against you. If first-time visitors deem your prices too low, there’s a chance they will mistrust your products and services. Some people who have bought similar items from other online retailers will have a price reference, which makes low-ball prices even riskier. While customers do like a good bargain or promotion, you must take care to convey quality with your pricing.

3. Ecommerce Transparency

It might be more mainstream now compared to 20 years ago, but ecommerce still comes with a certain degree of risk. People want to know they can trust the retailer to deliver, and so it’s important that companies are transparent.

Advertising products at a bargain price to attract attention and then increasing the price at the point of sale is not a clever strategy. It certainly won’t help foster any trust with your target audience. Displaying a clear and detailed breakdown of all prices, including shipping costs, is a much better method.

How to Influence Online Shoppers’ Perceptions on Price

Price perception directly depends on how you want to position your brand. Will you target high-end luxury shoppers or are you planning on attracting price-sensitive customers? When it comes to ecommerce price perception versus reality, it all comes down to the value proposition. If you get your value proposition right, your company will be able to dominate the market.

On the other hand, if you get it wrong, your target customers will have a very different perception of your brand and products. They will likely perceive it to be one of low value. There are a few ways you can alter their perception.

Range of Products

The range of products you offer on your online store can directly impact the perception people have about your prices and the value of your products and services. This can vary, depending on who your target audience is. For some, a wider range is better, while a smaller range of products can convey higher quality to other audiences. By displaying low-quality cheap products next to high-quality, more expensive ones, you can play on consumer psychology to encourage your customers to spend more money on the second product.


In ecommerce, branding is everything to command higher prices. It’s what differentiates your company from part-time business owners and solidifies your position among the full-fledged businesses leading the market.

Amazon is arguably the leader in price perception, with their personalized product recommendations often thought to be of great value by their customers. It’s little surprise they have such success with ecommerce personalization when their branding is so good. Psychologically, whenever a customer is exposed to professional brand messaging from a reputable brand name, they automatically think of higher prices.

You sure can brand your products a hundred different ways, from a unique voice in your marketing materials to having powerful product descriptionson your online store. Successful branding enables companies to make their customers equate those higher prices with higher quality. With a strong brand, customers gravitate to you above all other options. They are willing to pay premium prices for your products, particularly when many others are.

Offer Better Service

Your online store may not be as big as Amazon, but you can still present your customers with a strong value proposition in other ways. For example, by going the extra mile with your service. Offering free shipping and a hassle-free return service for all products is a smart way to influence the price perception your customers have. If they know they can return an item for free, they will be less concerned about paying a high price upfront. Ideally, your products will be great quality, which means returns won’t happen often. But having some attractive options in your service certainly won’t hurt, as it adds to the perceived value of your products.

Set the Right Price

A study on “Charm Prices” found that items with lots of nines do better than most. For example, when a test was carried out on three different products, listed at $34, $39 and $44, the middle item sold best. The research concluded that such charm prices can potentially boost an item’s value by about 24%.

It’s important that companies consider how similar products and services are priced elsewhere online, and what promotions your competitors are running. Making great personalized product recommendations that attract your customers is a big part of ecommerce personalization. However, getting the price wrong can be a costly mistake in your marketing strategy. Finding the sweet spot that conveys quality and value is crucial for your brand and your bottom line.

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