In the past, when marketers referred to “exchange,” they were mostly focused on its pros and cons. But in recent years, it’s become increasingly important for them to pay attention to exchange rates as well. As of May 2017, there are about 12 different ways that people can get their hands on US dollars. That means marketers have a lot more work than ever before when it comes to figuring out how much things cost in other countries and representing those prices fairly on their websites.
Since consumers are doing more cross-border eCommerce these days, marketing teams need to be aware of how exchange rates affect pricing decisions for both themselves and their customers across borders. In this article we’ll give you all the information you need so you can make the best decisions.
Marketers have a lot more work than ever before when it comes to figuring out how much things cost in other countries and representing those prices fairly on their websites
leads you to need so you can make the best decision for yourself or your customers across borders
It may seem like an easy question, but there’s actually no straightforward answer because every situation is different. So let’s start with some basics: What does “exchange” mean? Where do marketing teams find exchange rates? And why should they care about them anyway? If we know that, then we’ll be able to figure out what questions we want to be answered next.
when referring to “exchange,” marketers are focusing on its pros and cons
So now we know that exchange rates matter because they dictate how much something will cost in other countries and that it’s not just about what this product is worth in dollars but also what it’s worth relative to where someone lives. And if we’re willing to put time into figuring out which conversion rate should be used, then there are some definite upsides: Consumers might find better prices for products and marketers might be able to calculate their ROI more accurately.
The pros of using exchange rates in marketing
when it comes to prices, consumers will find better deals abroad
as far as conversion rates go, “when we know” that they’ll have a higher accuracy rate when calculating return on investment (ROI) because marketers can now use them with greater certainty
The downside is that there’s some extra work involved. Companies need data from each country about how much people are paying for goods so they’re able to properly set up what something should cost locally. And companies also need someone who knows which type of currency conversions make sense or else they could end up losing money by not understanding that they’re not taking into account market fluctuations when making decisions.
The cons of using exchange rates in marketing
there are a lot of extra costs involved, like hiring someone who knows what they’re doing and can do all that work to get pricing data from different countries
marketers also have to make sure they take currency fluctuation into consideration when setting prices or else they could be losing money by using outdated conversion rates
For these reasons, many companies choose not to use it because even though it helps with ROI calculations, “it’s hard” for them to justify the high costs. Nevertheless, there are some instances where you’ll see an eCommerce company pull out their calculator on occasion – this is usually when percent savings can outweigh the extra costs.
When companies do use exchange rates, they usually “pay attention to it” and consider some factors
one of these is how much money percent difference there is for a certain product
another factor that might make marketers want to pay more attention to this are if margins were razor-thin – in other words, if they only have a small profit margin as it is
those who decide not to take into account changes in currency fluctuation will lose sales, especially when their customers get poorer due to inflation (this could be because of higher prices) or when their customers’ countries devalue theirs against the USD; this would happen when foreign markets see an allurement from our country
when this happens, “exchange rates can have a profound effect on companies’ bottom lines” and they might be forced to make tough decisions like raising prices or cutting jobs; the latter would not only affect those who were laid off but also marketing costs as well
one of the best ways for marketers is to understand that exchange rates are important when it comes to their company’s financial performance
