Who this strategy is useful for:
● Your site is transient.
● You want to grow volume without impacting your overal margin.
● Your shop offering is superior to your competitors and you want potential customers to realise.
Set Objectives:
● Determine the percentage increase in volume needed to deem the strategy a success.
● Calculate the additional volume required to compensate for the lower margin, aiming for at least an equal percentage increase in volume compared to the percentage decrease in margin.
● Consider the potential impact on shop sales and calculate the return on investment.
Test:
● Identify which days you’d like to run this strategy, normally Monday – Friday.
● Lower prices during rush hours (for example, 7am-9am and 3pm – 6pm).
● Run the strategy for 4-6 weeks and extend if desired results are observed.
Assess:
● Continuously assess the impact of the strategy, comparing shop sales and volume with the average for the designated day.
● Evaluate any shifts in customer behaviour, for example, are customers who usually come in at lunch time now coming in either of the rush hours?
● Maintain a consolidated analysis on a spreadsheet for easy assessment.
Refine:
● Review the initial testing period results, considering the increase in volume, impact on shop sales, acquisition of new customers, and price sensitivity of the site.
● Adjust the pricing further if necessary to achieve a more significant impact.
● Continuously use the STARK framework (Set objectives, Test, Assess, Refine, Keep) to guide refinements.
Keep:
● Once the strategy has achieved desired outcomes, continue implementing it.
● Regularly monitor performance and competitors’ reactions.
● Be open to reevaluating and adjusting the strategy if its effectiveness declines over time.
Remember, the key to success lies in consistently evaluating, refining, and adapting your pricing strategy to align with your goals and market dynamics.
