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Do you know what customer churn is? And more importantly, do you understand why it matters for your business?

When you sell any product or service, you want to strike a careful balance between charging a price that leaves you with a profit and one that encourages customers to buy. Charge too much, and you may price out customers. Charge too little, and you may end up losing money on each sale.

But what happens when you take pricing below the cost of production? This tactic – known as predatory pricing – aims to drive out your competition by forcing them to lower their prices.

Introduction

Pricing is a core component of an eCommerce business day to day operation. It is often one of the main things a consumer considers when deciding to make a purchase and therefore plays a critical role in determining a company's success.

Picture this: You're a thriving e-commerce seller in the UK, renowned for your bestselling smart kettle. To tap into the latest trends, you introduce a new version with voice control - the perfect update to your product range.

Now, your customers can adjust the temperature of their kettle, order refills, and manage settings from anywhere in the house - all with just a few simple voice commands!

Before long, you notice something alarming - while the sales for the voice-controlled kettle soar, the sales for your original bestseller plummet. The net gain? Minimal. In the quest to innovate and diversify, you've inadvertently taken a bite out of your own success.

Welcome to the world of market cannibalization.

Have you ever found that despite having a steady stream of subscribers, your subscription business's revenue isn't scaling as you had hoped? Or perhaps you've noticed an unexplained drop in customer retention, leaving you baffled and searching for answers.

These challenges underscore a reality for many subscription-based businesses: tracking customer behaviour is essential for success.

With recurring billing cycles, long-term customer relationships, and a need for consistent value delivery, subscription models present challenges that intuition can't navigate alone. The solution? Metrics.

Finding the right price management strategy is an important element in running a successful business. Naturally, as markets change, so do the strategies required for price management.

Any business wants to maximise profits by pricing their goods and services at the right level – and to control those prices using an accurate pricing solution or price engine. Traditionally for many businesses price management has been conducted using Excel spreadsheets to calculate optimum prices – and to convey these prices to all concerned in the sales process. No-one is saying that Word and Excel Price Lists are a completely flawed system of managing pricing but the modern, accurate and more efficient way is to use a pricing software rather than the old fashioned methods that are so susceptible to error, manipulation and corruption.

When you run an eCommerce store, knowing how to price your products effectively can make or break your business.

Ever get frustrated that a competitor has changed their prices just after you changed yours? Do they always seem to be able to react instantaneously to any change you make? If so it’s likely that they’re using some form of price automation. If you’re changing prices manually, price automation can be incredibly irritating to go up against. It can feel like anything you do is immediately countered by your competitors.

How do you price a product? You look at the margin you want to make. Look at what your competitors are charging.