Two Ways to Localize Your Prices
Given the impact, it's important to know the distinction between cosmetic localization and market based localization.
1. Cosmetic Localization
Cosmetic Localization includes any type of change merely to do with apperance. This includes:
- Price: Using the latest exchange rates, you should be converting your price to the local currency.
- Currency: As Litmus did, you should be displaying your prices in the local currency.
- Language: Translating your website to the local language will appeal to more potential local customers.
These types of changes are the bare minimum of what you should be doing to appeal to your international audience. It's best to at least start with the areas that have the largest target audience and expand from there.
2. True Market Localization
With true localization, you're taking advantage of the different market saturation based on the area to maximize your revenues. In areas where you have a lot of competition, lowering your price point can appeal to customers there. But in markets where your product is scarce, raising your prices will bring in more revenue.
To determine how to set your prices, you'll need to localize based on:
- Market Saturation. This can be determined by price sensitivity studies in every market to determine your customer's ability and willingness to pay.
- Buyer Personas. Not every customer will be interested in the same features or design. By making sure your design and packaging of features highlight the ones each persona finds valuable, you'll be appealing to the right audience.
By changing your price based on markets and packaging your product based on persona, you are maximizing the power of true localization.