Word-of-Mouth and Referral Marketing Blog

How To Boost Loyalty With Online Pricing Tactics

Note: This is a guest post from the team over at Prisync

Whilst traffic is an important part of the equation, attracting visitors to your online store does not guarantee success.

You should also concentrate on how to make them loyal, long-term customers by forming a bond with them – and then motivating them to purchase for the second, third and fourth time.

Look at the analysis made by RJMetrics below:

Repeat Purchase Probability

According to research, the likelihood of a third purchase jumps past 50% after the second.

Here’s what I am actually trying to say:

Two of the biggest fears online customers have is the fear of spending too much, and the fear of acquiring the wrong product. If the online store is able to help their customers reduce their concerns, the relationship between them will become strong – and the loyalty longer.

As a result, that positive mutual relationship will encourage them to visit regularly, purchase more and develop a favourable perception towards your brand.

This turns them into evangelists – which of course, as we know, drives effective and cheap marketing.

To get this kind of loyalty, you should focus on customer satisfaction and ensure that every single component of your business delivers the highest quality. I’m talking about product quality, customer support, delivery, package, and so on.

But chief amongst these component, pricing plays a crucial role.

In this article, we’ll show how pricing tactics can support customer loyalty and help you to make difference.

1. Use your top-selling products to boost loyalty

Focusing on your top-selling products and using them as your marketing weapon will help keep your customers coming back to your store.

The question is – how do you leverage your top-selling products as a marketing strategy?

Price your top-selling products same or very close to the competition.

This competitive pricing move allows online shoppers to compare your prices with other sellers. After their evaluation, your prices will be seen as fair by and they will think your store is a safe place to shop in terms of price.

I know, I know. You may not want your potential customers to compare different stores before making their decision – you want them to buy from you.. now.

But the truth is – online shoppers compare at least 3 different stores before making their final decisions. Instead of fighting this trend, learn to flow with it.

By giving them the perception that your prices are honest and reasonable, this helps increase loyalty and builds your brand value. In return, it enables you to compete better with other retailers in the market.

After you’ve set your best-performing products’ prices nearer to the competition, the next suggestion I have is to price middle or low-performing products differently.

What this should be is dependent on your financial strategy.

A price monitoring software is handy here if you’re seeking a way to automate that process (and also if you want a fine-tuned competitive pricing strategy.) By adopting such a technology into your online store, you can concentrate on analyzing data – and making strategic decisions instead of wasting your valuable time collecting price data.

2. Consider using everyday low pricing

Source: BrandChannel

By deciding to apply everyday low pricingyou guarantee that you always offer the lowest prices among all the players in the market.

This approach provides a strong commitment between brand and its customer base.

By using this approach, your store can also focus on one key marketing message – which is about “whatever you search, you can always find the best deals from my lovely online store”. 

Moreover, with this strategy, you no longer need to capture trends (like Black Friday/Cyber Monday), nor do you have to focus on shipping regular promotions and discount just to get sales.

Everyday low pricing will also simplify the research process of customers. They know that they can always get the best deals from your store. They no longer need to hop around and price hunt, because they know you will always offer the best deals!

There is a caveat though. The risk of such a strategy is potentially addressing the wrong audience. To make this work, you have to target online shoppers who have named pricing as one of their purchasing criteria.

Another point is that you have to make sure that you do not fix your prices. The ecommerce market is vey competitive and dynamic, and prices are changing every day. If you maintain a low price without cross-referencing it with your competitors, you might be losing out on potential profits.

3. Differential Pricing

Like any business, you probably have different customer groups that differ in interests, behavior, demographics and expectations. This means: setting the same price for every group will not do too well for boosting customer loyalty.

And this is the reason behind why I’ll suggest you adopt differential pricing.

Differential pricing is a pricing approach n which a product is priced differently based on various segments like the customer group, location, type of product or quantity of product purchased, different circumstances, etc. 

By setting customized pricing towards different customer groups, you stand a chance of making them loyal to your products and brand.

Know your customers, understand their motivations and use your creativity. Here some quick examples of differential pricing:

  • Set a discount of 10% on a PlayStation game for students who had +3 purchases from you at past.
  • Give a 25% discount for next purchase for online shoppers who had not made a purchase in last three weeks.
  • Give a 30% discount on keyboard for customers who bought a desktop in last month.

If an online shopper assumes they may get customized surprises from your store, they’re more willing to visit you a second, third or more times. 

The impact of pricing on customer satisfaction

Until now, we’ve specified some pricing strategies that support customer loyalty.

From now on, you’ll have a clear view of the correlation between pricing and loyalty and how they enhance each other’s performance.

The research of Hermann et al. (2007) shows us that the satisfaction of a customer is highly correlated with the price of a product.

If an e-commerce retailer sets the prices at a high-level, the expectations of an online shopper will be also high. For example, if you are selling home appliances and you’ve set your prices above your competitors, your customers will demand rapid delivery, installments, post-purchase services like repair and maintenance, perfect customer support, etc.

That’s the customer psychology – if they spend their hard earned money, they expect a complete service.

It is impossible to set low prices, deliver perfect support and offering high-quality products. Of course, the customers may prefer that, but you’ll have to convince them by showing them why your prices are high and why you need to purchase from you. 

How would you achieve that?

First of all, in order to provide excellent support and seamless experience, you need to find financial resources.

Increasing your prices and targeting high margins are definitely great way to have a healthy financial status.

So, design your marketing strategy to demonstrate why your prices are high and what is your competitive advantage in terms of quality and service.

There is good news though.

In Anderson’s Customer Satisfaction and Price Tolerance study, great shopping experience decreases price sensitivity.

It means that if the customers are satisfied with the overall shopping experience, price becomes less of a factor and increasing your prices won’t impact their shopping decision.


Encourage your customers to come back to your store by providing customized pricing approaches. This can be done through different online pricing tactics.

We hope these pricing strategies have inspired you and given you some ideas.

Try to apply them and let us know. We would be more than happy to hear your stories.

Si Quan Ong

Si Quan is ReferralCandy's Content Marketing Manager. He is also the co-founder of BreakDance Decoded, an online breakdance training company. He loves standup comedy, and has a dream to visit at least 100 countries in his lifetime.