JJ Tyson — November 18, 2019 In ecommerce, we know that people abandon for a variety of reasons. Some consumers become distracted, some are chronic window shoppers, and some just don’t want to pay for shipping. However, one of the most common reasons for abandonment is perhaps the simplest: price sensitivity.
Price sensitivity is friction to conversion that results from concerns about a product’s price. While many sites utilize coupon codes to reduce abandonment, sometimes these are not enough.
While small incentives are highly effective for giving an extra push to shoppers on the fence, bargain hunters are often waiting for a larger incentive to purchase. That’s where Price Drop Alerts become helpful.
Common Use Cases for Price Drop Alerts
Price Drop Alerts are already extremely popular for certain ecommerce sectors, specifically travel and hospitality. But how do they work, exactly?
Let’s say a customer is searching for a hotel room. Though they may not want to book immediately, the site can capture the user’s email, then send a price drop notification when the rate decreases. This notification encourages them to convert while the accommodations are still available at the rate they are most comfortable paying.
While these notifications are frequently used by travel websites, they can have much broader applications. Let’s take a look at five reasons they are so powerful.
They Fortify Your Lead Capture without Additional Incentives
Motivating hesitant shoppers to convert often proves challenging in the absence of incentives. However, these discounts can impact revenues and make it more difficult to generate a reasonable profit on your products when offered to all users.
Fortunately, Price Drop Alerts offer a happy medium. Rather than having to offer a discount on all products, notifying the customer about a decrease in price leverages normal fluctuations to reduce friction and incentivize purchases.
Allowing customers to set a Price Drop Alert is an excellent way to collect leads because it provides a win-win – you get their contact information, and they save money down the road. Plus, since they’re waiting to hear from you about a specific item, they’ll be motivated to stay on your list.
Price Drop Alerts Can Be Leveraged as an Abandonment Strategy
Offering incentives to abandoning customers is one of the most popular (and effective) ways to reduce abandonment. However, you can leverage sale alerts as an abandonment strategy as well.
When a customer is getting ready to abandon a page, you can show a message that says “Notify Me When on Sale’. This strategy turns abandonment into a lead capture opportunity, without the need to offer an additional incentive.
They Encourage Customers to Try New Products
If you’ve never experienced a product in person, buying online can sometimes feel risky.
Some customers are unwilling to take a chance on certain products if they’re full price.
A Price Drop Alert means that these hard-to-convert customers may be willing to reconsider once the item goes on sale – even if they wouldn’t have had enough interest to continuously check your site for a discounted price.
They Can Improve Your Product Recommendations
When a customer requests a Price Drop Alert, it indicates a vested interest in the product. In many ways, it’s similar to bookmarking or “wishlisting” an item. Knowing what your customers are considering, and what price range they may feel more comfortable in, helps you gather data and offer a more personalized shopping experience.
Offering price drop notifications means that you can remarket to these customers by showing them similar products at a lower price point. If the initial cost is comparatively low, they may convert even without an additional incentive.
They Make Shoppers Feel Like They’re Getting a Deal
Let’s face it: everyone loves a deal. Customers like discounts for a couple of reasons.
- They save the customer money
- The act of “getting away with something” triggers the hormone that makes us happy.
Notifying customers about a price drop allows them to feel like an insider – even if they’re simply shopping part of a larger sale.
Keeping Shoppers Alert
Offering Price Drop Alerts creates a more dynamic shopping experience that directly combats price sensitivity. As a strategy, they bolster your lead capture capabilities, and create a shopping experience that customers want to be a part of again and again.
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