What Is Price Localization & How Can It Help Your Business?
If you’re looking to succeed in a global market, then you’ll want to use every tactic at your disposal. Competition is fierce, and you want to ensure that your company is being used over all the others out there. One way you can do this is by using price localization. Here’s what it is, and why you should be looking into it.
What Is Price Localization?
Firstly, let’s let have a look at what price localization is, and what that means for your business. Price localization is the process of changing the currency or price unit of a product on your site, to match the currency of the country a visitor lives in. This is a highly useful strategy in the global market, as using it shows that you’re committed to selling in the country the visitor lives in, and makes it easier for them to consider buying from you.
Some may consider the currency change to be purely cosmetic, but when implemented correctly, it can be practical and useful for customers. They can see at a glance exactly what they’ll be spending with you, and when they know that, they’ll be more likely to buy. Plus, they’re more likely to buy from you as they’ll trust you more.
To do this, you won’t simply convert prices into the local currency. You’ll have to calculate prices based on several factors. That includes conversion rates, cost of living in that area, competition, and so on. As a rule of thumb, the higher the competition, the lower the prices should be.
You can use price localization as a strategy on its own, or you can use it with other personalization techniques. When you use these techniques together, they’re very powerful and can bring in a lot more custom overall.
Why Companies Are Using Price Localization
You’ve seen some good reasons to use price localization already, but why are other businesses using it already? “It’s one of the smartest ways to bring in new customers in an area where there’s a lot of competition,” says Lauren Oakes, a marketing writer at Elite Assignment Help and UK Services Reviews. “That allows you to find a space for yourself in the market, and show customers that you’re a company they want to work with.”
It’s also a good way to raise revenue in areas of low competition by charging according to what the customer needs, and whether they can easily obtain that product elsewhere.
Creating Your Own Price Localization Strategy
Now you know the basics of price localization and how it works, you’ll want to put together your own pricing strategy for your company. Here’s how you can do so to get the best results.
Use local currency for basic price localization: If you’re simply looking to get started with price localization, then you’ll want to simply give customers the option to choose the currency that works best for them. That can just be an option to switch to a different currency when they’re viewing a product on your website.
This is something you’ll want to consider if your customers are also international businesses. Many prefer to conduct all of their spending in their local currency, as that helps keep accounting simpler. Others may want to conduct all business using the US dollar, so that’s something else that you need to consider.
As mentioned above, this benefits you as the customer will trust you more when they can buy from you in their local currency. They’ll also appreciate that you’re working to make buying easier for them, and that encourages them to keep coming back.
Do the research into localization: If you want to do more specific price localization, then you’ll need to do your research to do so. This is a step that you cannot miss, as the more research you do, the better your pricing will be.
You should be able to look into what your customers need from you, based on their location. Part of this will be looking up your analytics and seeing what people in a certain area are buying from you. You can also ask customers and clients what they’re looking for, or look into what your competitors have done. Part of the process is ensuring that your customers will get their needs met, wherever they are.
You’ll also need to understand the cost of living in the area you’re focusing on. This is an important aspect, as your prices need to be just right. They should be competitive in areas of high competition, but not so high in areas with low competition and a high cost of living that people simply don’t buy from you.
Remember that pricing is a part of customer satisfaction, too. You’ll need to set prices at a point that customers are happy to pay for.
Make the most of social media: Social media is a powerful tool when it comes to online business, and you can put it to use when creating your own price localization strategy. When you’re using it regularly, you’ll be paying attention to your customer’s needs, and understanding what it is they need from you. That’s very helpful in the long term.
The way you use price localization will differ slightly, whether you’re a B2B or a B2C business. Either way, you can use social media to target different areas, with different pricing structures.
“For example, if you’re running ads on social media, you can set up different ads in different areas,” says eCommerce blogger Adrian Peters, from Revieweal and UKWritings. “That allows you to show prices in local currency, making your audience click and make a purchase from you.”
You can also use social media to stay in contact with your audience and use it as a line of communication. It’s very helpful when you’re trying to find out what they may want from you as a business.
Create packages for your customers: One really good way of price localization is to create price packages for your customers. These are bundles that add several products or services together, and their prices of them can be tailored depending on the customer and where they’re viewing it from.
You can look at including some perks, in order to tempt the customer into choosing you over the competition out there. For example, if your business offers communication systems, then you can bundle together a system and add a business phone line number as a perk if they choose you.
Don’t lose sight of your goals: When putting a price localization plan in place, ensure you know what your goals are. Why are you looking to use this strategy? That helps you use strategies that are going to help you achieve those goals, and ensure that you get what you need from it.
Price localization is something that more and more businesses are using now, in order to keep relevant and grow their businesses across the globe. You do need to stay ahead of the game and start becoming more competitive in areas where your competitors are working. When you use price localization right, you’ll be able to position yourself as one of the top businesses in your industry, everywhere.