GLOSSARY POST

Strikethrough/Cross-out Pricing

22 days ago
1 min read

Strikethrough pricing, also known as cross-out pricing, is a strategy where the original price of a product is visibly crossed out and a lower price is advertised alongside it. This tactic is used across various industries, including retail and e-commerce, to communicate discounts and promote sales.

Key Objectives of Strikethrough Pricing:

  • Highlight Discounts: Clearly shows the reduction from the original price, emphasizing the deal that customers are getting.
  • Sense of Urgency: Indicates that the lower price is for a limited time, encouraging customers to act quickly.
  • Perceived Value Enhancement: The visible price comparison enhances the perceived value of the deal, making the lower price seem more attractive.
  • Behavioral Influence: Aims to attract price-sensitive shoppers, encourage bulk purchases, or promote new or less popular products.

Drawbacks of Strikethrough Pricing:

  • Potential Misleading: If the original price is inflated artificially, it can mislead customers, affecting trust and credibility.
  • Profit Margins: Frequent discounts can condition customers to expect reduced prices, potentially harming long-term profitability.
  • Market Pressure: If competitors offer similar or greater discounts, it can lead to a price competition that may further thin profit margins.

Best Practices for Strikethrough Pricing:

  • Accuracy in Pricing: Ensure the original price is legitimate and reflects a genuine, usual selling price to maintain credibility.
  • Clear Communication: Clearly state the terms and conditions of the offer, including the validity period and any exclusions.
  • Strategic Use: Employ strikethrough pricing selectively for specific purposes rather than as a regular pricing strategy.
  • Monitor and Adapt: Keep track of the market response and adjust strategies as necessary to stay competitive and profitable.
  • Value Addition: Pair price reductions with other benefits like exceptional service or loyalty rewards to enhance overall customer satisfaction and brand loyalty.

Strikethrough pricing can effectively drive sales and attract customers if used responsibly and strategically. It's crucial for businesses to balance this tactic with fair pricing strategies and quality service to build lasting relationships with customers.

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