Did you know that Amazon changes its prices more than 2.5 million times a day?
As businesses continuously adjust their prices to match market demands, it's crucial to communicate these changes transparently to the consumer.
A key tool in this approach is the online custom calculator. This tool not only helps calculate dynamic prices but also effectively conveys this information to the customer.
In this article, we will explore the benefits of custom calculators for dynamic pricing and learn how to create one using a no code builder platform.
Understanding Dynamic Pricing
Dynamic pricing, also known as surge pricing or demand pricing, is a strategy where businesses adjust the prices of their products or services in real time, based on supply and demand conditions. This strategy contrasts sharply with static pricing, where prices are set for a specific period and are not subject to frequent change.
Static pricing, although simpler and easier to manage, often lacks the flexibility and responsiveness of dynamic pricing.
While static pricing may still be suitable for some businesses, the trend, especially in e-commerce and service industries, is shifting towards dynamic pricing. This strategy offers a more sophisticated and proactive approach to pricing, helping businesses to stay competitive and customer-centric in today's fast-paced market.
Types of Dynamic Price Strategies
There are different forms of dynamic pricing strategies, each suited to achieve specific objective.
Segmented Pricing: This dynamic pricing method offers different prices for different customers, creating an atmosphere of inconsistent pricing. For example, high-value customers might face higher prices due to their purchasing power and demand for exclusive or premium services.
Time-based Pricing: This dynamic pricing model is employed by companies who wish to charge more for speedy services. This approach directly ties into future pricing decisions, considering the potential growth in customer demand for quick and efficient service delivery.
Peak Pricing: This strategy involves charging more during times of high demand of customers. For instance, ride-sharing services or electricity providers often increase prices during peak usage hours, mirroring a direct response to demand pricing.
Value-based Pricing: In value-based pricing, the price primarily hinges on how target audience perceive a product's value rather than the production costs or competition. This dynamic pricing strategy acknowledges that a higher perceived value often leads to a greater willingness to pay, making it an important tool for luxury brands.
How Custom Calculators Can Effectively Communicate Dynamic Pricing? +EXAMPLES
Online calculators are thus not just a tool for businesses to calculate dynamic prices but also an effective way to communicate these prices to customers. They help bridge the gap between businesses pricing strategies and customer’s understanding of them, ultimately leading to more satisfying and successful ecommerce experiences. Using interactive calculators for pricing communication offers several benefits:
Transparency and Trust: Online custom calculators help businesses present their current pricing model in an open and clear way, which enhances trust between the customers and the business. When customers have the ability to understand the pricing structure and calculate the cost of products or services based on their specific needs, it helps in reducing the ambiguity and boosts customer confidence.
For example, Lowe's tile flooring calculator allows customers to understand their pricing model by calculating the cost of tiling a specific area based on dimensions (length and width) of their room promoting transparency and building trust.
Interactive User Experience: The dynamic pricing model can often be complex to understand. With an interactive calculator, businesses can provide personalized experiences to the customers. The users can manipulate various factors to see how they affect the final price, helping them understand the pricing structure better.
Check how Vivint Solar's Solar Calculator creates an engaging experience by actively involving the users. It requires users to input specific details about their home such as size, monthly electricity bill, location, and type of home to calculate their potential solar savings and understand how these variables impact the final cost.
Flexibility: Online calculators can effortlessly accommodate changes in dynamic pricing models. If the costs of resources or services fluctuate, businesses can update their calculators to reflect these changes immediately. This ensures customers always have access to up-to-date information, which aids in their decision-making process.
For example, Ford's online payment calculator can seamlessly adapt to changes in dynamic pricing models, reflecting up-to-date vehicle prices, interest rates, and other financial variables to provide customers with current and accurate monthly payment estimates.
Cost and Time Efficiency: With custom calculators, customers can instantly calculate their potential costs without contacting sales or customer service representatives. This speeds up the purchasing process and reduces operational costs for businesses, as they don't have to invest as much time and resources into addressing simple price inquiries.
Lithia Chrysler's online car loan calculator allows customers to quickly calculate potential financing costs, streamlining the buying process and reducing the need for dealership staff to field basic pricing inquiries.
Setting Up a Custom Calculator Using involve.me - A Step-by-Step Guide
involve.me is a popular tool for creating interactive content, including custom calculators. Here's a step-by-step guide to set one up:
Create an account: Sign up for an involve.me account and select a suitable pricing plan based on your needs.
Choose a template: involve.me offers ready-made calculator templates library. It provides templates for building various types of calculators such as cost, savings, pricing and ROI calculators, among others. Choose the one that best fits your business or build one from scratch.
Customize your calculator: Customize your calculator by adding your inputs (factors that can impact your calculation), your formula element using involve.me formula builder (how these inputs interact to calculate a price), and your outputs (what the user sees after the calculation).
involve.me calculator templates offer:
the use of basic operators (plus, minus, multiply, divide, exponent), as well as bracket symbols to control the order of operations
IF/THEN logic that includes multiple conditions
a formula builder that allows for complex calculations using basic operators and bracket symbols
the ability to take answers given by the user and calculate and display the result according to the custom formula
calculation formulas to reach different outcomes based on individual scores. This makes the calculator highly flexible and capable of showing customized results based on the user's inputs.
Responsive calculator design: Tailor the look and feel of the calculator to match your brand. You can change colors, add logos, and add other calculator elements from "content elements" option.
Publish and share: Once you're satisfied with your calculator, publish it and share the link on your website, social media, or email newsletters.
Integrating Your Calculator: Next, integrate your calculator with your ecommerce platform. This process will depend on the specific platform you use. involve.me allows you to embed your calculator directly onto your website using a snippet of code, URL and shortcode.
Utilizing involve.me to Calculate Discounts
Discounts are a common aspect of dynamic pricing, and involve.me can help manage them effectively. You can set your discount calculator to factor in different types of discounts (like bulk purchase discounts or seasonal sales) and adjust prices accordingly. You can even set up conditions that trigger discounts only when certain criteria are met (like when a customer's cart exceeds a certain value).
Use Case for involve.me Discounted Calculator
Suppose you own a small online retail business and want to use a custom calculator on your website to help customers understand the final price after discounts and potential sales tax. Here is how you can use involve.me to build your discount calculator.
Using the Formula Builder: Create a calculator from scratch and use involve.me's formula builder. Now you can create input fields for the original price, the discount percentage, whether tax is included, and the sales tax percentage. Create your own custom formula:
Inserting Inputs: In the formula, Q1 represents the original price, Q2 represents the discount percentage, Q3 is a conditional variable (1 if tax is included and 0 if not), and Q4 is the sales tax percentage. By setting these as variables in the calculator, the customer can enter their known values, and the calculator will output the final price.
Results: Once a customer inputs the values, the formula first calculates the discounted price (Q1-(Q2/100Q1)). If tax is included (Q3=1), the calculator then adds the amount of sales tax ((Q1-(Q2/100Q1))*Q4/100) to this discounted price. If tax isn't included, the calculator simply provides the discounted price. The result is displayed to the customer, giving them a clear understanding of their final cost.
IF/THEN Logic: The IF/THEN logic in the formula is the decision-making part of the calculator. If Q3 equals 1 (meaning tax is included), the calculator follows one set of instructions, adding sales tax to the discounted price. If Q3 does not equal 1 (tax isn't included), the calculator follows a different set of instructions, providing only the discounted price. This logic allows the calculator to adapt to different scenarios based on user input.
This way, you can provide a useful tool for customers, offering transparency in pricing, and ultimately improving the customer shopping experience.
Let’s have a look at one of the involve.me discount calculator:
In the era of dynamic pricing, online custom calculators enhance the transparency of pricing strategies, encourage user interaction, and provide businesses with an efficient means to communicate price updates in real-time.
Innovative calculator builders like involve.me simplify this process by offering an intuitive platform to create, customize, and seamlessly integrate these calculators into your website. So why wait? Enhance your customer experience and strengthen your business strategy by creating your custom calculator with involve.me today!