Gas What Your Shoppers Are Worried About!

Top-of mind for American consumers from time to time is the high cost of gasoline. They can only guess when there will again be a drop. These concerns about such transportation expenses on even short trips shift the preferences of your target consumers toward shopping online rather than at your brick-and-mortar store site. In addition, the price of fuel affects shipping costs from your suppliers and to your customers.
     A while back, The Huffington Post published a set of tips for small business owners on coping with the situation. Among the suggestions was to add a fuel surcharge to your purchase prices. The argument for doing this is that your customers all realize when gasoline prices are rising.
     Partitioned pricing, in which you state an item’s cost as a main price plus one or more surcharges, can work. However, the problem with a fuel surcharge is that the partitioned pricing calls attention to transportation as the reason for a price increase on an item. Researchers at University of Pennsylvania and University of Florida found that customer anger is most likely when the retailer's explanations for increases in product costs are in terms of transportation or insurance. They concluded that the explanations most likely to head off customer anger center on the cost of goods to the retailer from the supplier.
     Explain that you need to increase your prices when your supplier increases their costs to you. Adapt the following to fit your style: “When our suppliers increase their prices to us, we need to pass those increases on to the customers so that we can stay in business and continue to serve shoppers like you and employ the people like me.” Although the basis for suppliers charging you more might be the dramatic rise in transportation and shipping costs, avoid using this as a reason with customers.
     Another of the Huffington Post tips does make sense from a consumer psychology perspective: In delivering purchases, consolidate trips, even if this delays the arrival for customers. Charge extra for expedited delivery. Researchers at University of St. Thomas and University of California-Berkeley say consumers are likely to consider the extra charge as fair because it is a common practice to levy a fee for expedited delivery.
     Other research suggests that acceptance is even more likely if you present the delivery charge as the one for expedited delivery and then offer a discounted price for a longer delivery time.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Use Partitioned Pricing to Highlight Benefits
Explain Price Ups & Downs to Customers
Prepare Customers for Price Increases