Developing seasonal pricing strategies
A seasonal pricing strategy will help you minimise loss of cash flow in low periods and maximise profitability in peak seasons.
Changing your pricing will help you capitalise on your target market’s spending habits. Keep in mind that creating a marketing campaign to bring awareness to your price change or seasonal deals will be critical in meeting your business objectives. Consider the following steps to get the most out of your seasonal pricing strategy.
Know your customers
Previous buying patterns should influence campaigns. Tailor your pricing to the needs of your target market, and segment your market and develop a range of pricing strategies to maximise customer engagement.
Pricing for low and peak periods
Your pricing strategy should accommodate fluctuations in customer demand. Break your year into low, mid and peak seasons. While offering an off-peak discount may boost your profits by incentivising your customers, increasing your premiums in peak season will help you capitalise on high customer demand. Experiment with pricing so that your discount does not encourage customers to wait until your peak period is over and your premiums do not drive away customers looking for better value. Look to the market to help you strike the right balance to maximise the benefits of seasonal pricing.
Holiday based strategies
The customer influx in Christmas and the New Year is an opportunity for you to tap into the spending season with your pricing strategies. Advertising seasonal deals well in advance are essential to reaping the benefits from your price change and gaining an edge on your competitors. Offer incentives like a gift wrapping service, loyalty credits or special deals on your most popular products. In the post-Christmas sales look to your competitors to see how far you should discount your prices to capture the largest market segment while keeping your profit margins high.
Reuse and recycle
Seasonal pricing strategies and their accompanying marketing campaigns can be costly. In order to reduce costs, reuse past marketing campaigns that were successful and recycle them only if they are still relevant or need a few minor amendments. Assessment of pricing strategies should be ongoing to ensure your business is up to date with your customers’ spending habits.