Seasonal Pricing is about adjusting prices to match demand. You attract customers during slow periods and maximise profits when there is high demand.
Florists charge an arm and a leg for roses just before Valentine's Day. Hotels by the beach are cheaper during winter, and car parks in the city that usually charge by the hour have flat rates at night and weekends.
Apart from the obvious reasons like special occasions, holidays and the time of year, you can formulate a seasonal pricing strategy that suits your business and customer base.
The first step is understanding your business's unique sales patterns. This means analysing past sales data and observing broader industry trends to pinpoint when demand is high and when it tends to dip.
Check your sales records over the past few years and look for patterns. Are there specific months or events that bring a spike or lull in business?
You can also use free tools like Google Trends to help spot patterns and trends. Here are some examples.
Here for Birkenstock, there are surges in web searches around November and December. They could be bought as Christmas presents.
Here for Ugg Boots, It's no surprise that web searches peak during winter months.
Try these searches on your product range and see what you can find. The results might surprise you!
Once you know your busy and slow periods, adjust your Pricing to make the most of these trends.
When demand is high, customers are often willing to pay a bit more.
For example, a café could increase prices on iced beverages during the summer, when they're most popular.
If you're concerned about customer reactions, communicate the value they're getting. You may use high-quality ingredients or have more staff to offer superior customer service.
Use promotions to draw in customers during quieter times. For example, a fitness studio might offer discounted memberships in January to attract those with New Year's fitness goals.
Remember to highlight what makes your service special, even at a discounted rate.
Bundle your lower-demand products and sell them as a packaged deal. Your customers will feel like they're getting a good deal, and you will also benefit from clearing up more stock.
When raising prices, be transparent. Explain why prices are higher (e.g., increased demand or higher material costs) and emphasise the added value. After a sale, focus on customer loyalty by offering perks like loyalty points or exclusive previews to keep customers engaged at regular prices.
Keep your Pricing flexible but intentional. Don't change prices too frequently, or you might confuse customers.
Seasonal Pricing isn't just about adjusting prices. It also requires smart inventory management and well-timed promotions.
Planning ahead is crucial. Map out the entire year, scheduling when to run sales, adjust Pricing, or stock up on inventory. This approach ensures you're prepared rather than scrambling at the last minute.
An online clothing retailer could plan a summer clearance sale in March to make room for new fall items. By having this on the calendar, the team can coordinate marketing and inventory in advance.
While discounts are helpful, too many can cheapen your brand. Instead, consider offering limited-time promotions that create urgency. For instance, a bookstore could promote a "holiday reading" sale that lasts one week only, driving interest without hurting the perceived value of their books.
After a promotion, remind customers of the value your products offer at regular prices. Use follow-up emails to highlight new arrivals or share stories about the quality and craftsmanship of your products.
Planning your inventory and promotions together ensures you maximise profit opportunities while keeping your stock levels manageable.
Seasonal Pricing can significantly boost your business, but the key is to plan ahead. Being proactive means you're prepared to maximise profits during high-demand times and manage slow periods effectively. On the other hand, reacting to trends at the last minute can lead to missed opportunities, inventory headaches, and lost sales. By identifying your sales trends, adjusting prices strategically, and organising promotions and inventory in advance, you set your business up for long-term success. Remember, it's okay to experiment and learn from your experiences. Each season will teach you something new that you can use to refine your strategy next time.