Pricing Strategies that Boost Customer Loyalty

Don’t believe the myth that a low price is the only thing that motivates shoppers to buy product in your stores. The reality is that consumers want quality products that deliver exceptional value. Natural health-focused shoppers know the true value of the products they buy.

Let me explain. Have you ever received a good deal on something you didn’t like? We all have. The difference is that the core natural shopper knows the difference between quality ingredients and highly processed ingredients that do not deliver the nutritional value their bodies need and want. This is where you come in, and this is where you have a distinct competitive advantage in your market.

An effective pricing strategy can set you apart from other retailers, and it can be the difference between being perceived as a follower or as a market leader. The wrong strategy can strip margin and make it difficult for retailers to survive. It can even push consumers away, encouraging them to shop the competition.

Any brand with deep pockets can “buy” sales velocity but those brands contribute little if anything to sustainable category growth.

Shoppers have literally unlimited choices when it comes to where they spend their hard-earned money. They want quality products at a fair price. Delivering on this is how you convert occasional shoppers into evangelistic loyal customers. Retailers should partner with leading brands to maximize shopper engagement.

To achieve this goal, the top-selling items in each category should be priced equal to or close to the competition. This allows consumers to compare your prices against other stores, giving them the perception that your prices are good. This, combined with a strong brand strategy, empowers you to compete more effectively against other retailers.

Other items can then be priced differently based on complementary tactics and strategies. Retailers can use this strategy to make up for margin lost on items that are more aggressively priced, including “loss leaders.”

For example, an effective pricing strategy in the diaper category is one that drives shopper foot traffic to the diaper category. Economy diapers should be aggressively priced equal to other retailers in the market—by brand. Economy diapers should be promoted more aggressively. Premium and super premium diapers should be priced higher based on the additional benefits they provide. Adjacent/complementary categories could then be priced slightly higher to make up for the extra margin.

This strategy is effective because it encourages new parents to shop the entire baby care department to fill their child-care needs. Busy parents don’t have time to shop multiple stores to pick up all of the items on their shopping list. As a result, they will typically try to make all their purchases in a single trip, preferably at your store.

You can use this strategy across other categories within your store to gain the greatest benefit. Giving up the margin on a couple items will give you a larger market basket, more loyal shoppers, and happy, satisfied customers.


Note: The views and opinions expressed here are those of the author(s) and contributor(s) and do not necessarily reflect those of the publisher and editors of 
WholeFoods Magazine.

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Dan Lohman is a CPG and Natural and Organic Industry Strategic Advisor. His company Brand Secrets and Strategies provides innovative ideas, actionable insights and strategic solutions to the challenges that brands and retailers face. Dan assists retailers and brands in expanding their distribution, growing sales and getting their products on more store shelves and into the hands of more shoppers. His extensive knowledge reaches beyond traditional category management and has earned him recognition throughout the industry as an influencer, expert, speaker, trainer and thought leader. Dan is passionate about empowering brands and raising the bar. His Brand Secrets and Strategies podcast is a popular natural and organic products accelerator for food startups, healthy brands and retailers. In addition to sharing his 25 years of experience, Dan talks with well-known thought leaders, CEOs and founders of successful industry companies who candidly share insider secrets. As a top contributor to the leading trade publications, he has published over 300 articles. A trusted and respected member of the natural and organic community, Dan’s weekly newsletter, podcast, free resources and online mini courses have become an invaluable resource for brands and retailers seeking to grow sales and gain a sustainable competitive advantage. To learn more please visit: