As an ecommerce business owner, increasing the value of your ecommerce business should be your top priority. One of the key components for increasing that value is to increase your profit.
If you’re wondering how to increase profitability in ecommerce, especially if you’re currently struggling with low margins, you likely need to look at increasing the price you charge for your products. However, doing so requires thoughtful strategy, because increasing prices can create customer service issues if not done right.
In this post, we’re going to dive into a secret tactic you can use to increase your prices while making your customers want to buy even more.
Defining the “Unsale”
We all know what a sale is. Ecommerce businesses run them all the time, and most brands believe that every sale comes with some sort of discount. But in reality, sales don’t always have to be about a dollar or percentage off. What’s more important is creating and presenting a valuable offer your customer can’t refuse.
In this case of wanting to eventually raise prices, the valuable offer we’ll present to our customers is called the unsale. This is simply a promotion run prior to increasing your prices. By letting your customers know that prices are about to go up, they will have the opportunity to buy “on sale”, without you even discounting your product.
No customer likes a price increase, but communicating with them and running the unsale is a way to smooth things over with your customers while also generating a spike in revenue for you. It works well because it pushes any fence-sitters over the edge. Whether they’ve been thinking about making their purchase for a while, or they’ve procrastinated coming back to buy again, this will be a way to enforce some urgency for people to take action now.
In the end, you’ll get to increase prices, run a sale without actually discounting anything, and see increased customers and revenue as a result. Win-win.
How to Run an Unsale
Step 1: Decide on Your Price Increase
Your first step will be to determine what the price increase will be, and the rationale behind it. You don’t actually have to communicate that rationale to your current customers, but depending on your brand and the type of relationship you have with your customers, you might want to.
How much you increase prices will look different depending on your brand and business model. But one important factor to consider is margin, the most important metric for your ecommerce business. If you’re currently operating on slim margins, you will never have the room to grow the value of your business.
Step 2: Create the Offer
Next it’s time to craft the offer your customer can’t refuse. The offer might simply be that prices are going up to $X, so now is the time to purchase and save $Y. But if you really want to make an irresistible offer, consider throwing something else in to sweeten the deal. Maybe there is a free gift with purchase, free shipping over a certain order amount, 2x or 3x loyalty points in your rewards system, or any other perk to push people over the edge.
Step 3: Prepare the Unsale Assets
Running an unsale is just like running any other ecommerce promotion. You’ll need promotional website assets such as banner images and capabilities for any additional perks you’re offering ready on your site. You’ll also need ads and emails ready to go, posts ready for social channels, and other messaging for current and new customers. Every asset should succinctly communicate the coming price increase, and the exclusive opportunity to buy now and save. Make these elements creative and eye-catching to stand out among the noise and really brand this as the big event it is!
Step 4: Run the Sale
Next it’s time to set the offer live. We recommend running the unsale for about 7-10 days before increasing your prices. Schedule your website assets for the promo, and then start driving traffic with ads, emails, and social posts that talk about the price increase and the limited time, irresistible offer.
One important note is that like any sale, people are likely to procrastinate. So in the last 3 days of your unsale, ramp up communication with 2-3 promotional emails per day as well as a few SMS reminders. People will wait until the last minute before taking action, and you want to make sure they don’t miss out.
Your Win-Win Strategy to Increase Ecommerce Profitability
Most businesses are afraid to increase prices—partly because they’re not sure how to do it, and partly because they’re afraid it’ll be seen as a bad thing. Other brands go ahead and increase their prices, but miss out on this opportunity for added benefit. Don’t be either of those businesses!
The unsale strategy is an effective way to increase prices while giving customers a heads up so they can enjoy a “discount” while you see a spike in revenue before prices have even gone up. It’s a win-win strategy and a no-brainer if you are looking for how to increase ecommerce profitability.