Pricing Psychology
November 1, 2021
Has this ever happened to you where you’ve gone out to a shopping mall to buy the thing you need, but you’ve ended up purchasing more than anticipated? It happens a lot—those tempting sales, discounts and offers. You can’t seem to hold yourself back. As a seller or marketer, let’s deep dive into psychological pricing so that you can start selling more.

What is Psychological Pricing?

Psychological pricing is a pricing strategy utilising specific techniques that impact consumers psychological or subconscious. It combines price and sales tactics. We’ve unpacked below 17 ways to sell more using this methodology. 

1. When an average person goes shopping, they tend to spend less money because no one wants to feel the pain of spending too much money. Sellers need to take advantage of this perception.

For example: $100 
Since our mind reads from left to right, when we see $99.99 instead of $100, our brain considers $99.99 as a lesser magnitude.

 2. Use small font sizes to display prices. This tactic shows the low magnitude. But it is the opposite in the case of discounts. They should be in large fonts to highlight the amount or percentage of the discount.

3. The phonetic length of the price should not be too much while shopping. The brain has to make some quick decisions. If it finds difficulty in reading the information, the decision can be affected

For example, 2,556 can be read as two thousand five hundred and fifty-six, but if you remove the comma, it would be much easier to read 2556, i.e. twenty-five fifty-six.

 4. A/B testing is essential to see what is working and what is not working. You can test, for example, $200 + free shipping versus $180 + $9.99 shipping.

5. Feel free to reframe the price per week or per day. This can make the amount smaller and more accessible for the brain to understand. 
For example, instead of $550 per month, you can write it as $137.50 per week or $18.33 per day. 

6. According to psychological pricing, the upward direction is good, and the downward direction is bad. That’s why people look at numbers on a horizontal scale from left to right, and they are more likely to respond faster to smaller numbers when they’re placed on the left.

7. To sell more, you need to improve the customers’ experience with numbers. When you provide multiples of digits, people can process it faster and experience higher fluency.

For example:
Get 5 burgers for $50 
Get 8 (30 min) consultation calls a month for $240.

8. Use the principle of egotism to influence an individual. This idea will only work when you’re personalising the pricing for every individual. 
For example, if someone is born on June 18, put your price at $18.99. They will find it quite relatable and interesting because subconsciously, it matches with their birth date.

9. If you have a luxury product like jewellery, vehicles, etc., show the product first, followed by the price, because when you show the product first, people base their decision to purchase on the product’s qualities. On the other hand, if you have general products like mobile accessories, show them the price first so that they can make a decision based on the economic value of the price.

10. When male consumers see prices or advertisements in red, they feel more positive and perceive it to be more significant savings than black.

11. If you are preparing to introduce new products, raise the price of old products to increase the reference point for new product pricing.

12. Start by showing high price products and then jump to lower prices. This will help your customer understand that they will lose the quality if they go down with the price.

13. Create FOMO (fear of missing out) by adding time constraints like “sale will end soon” or “limited period offer”.

14. The key is to emphasise the quality of the product rather than the expense. People are willing to pay for the product that solves a particular problem that makes your customer’s life easy.

15. Give a discount in percentage when the price is under $100 so that customers can easily calculate the amount in their mind. If the price is above $100, the discount could be in a numerical value.

16. Typically, people would have a lower budget spend at the end of the month. You can take advantage of this situation by giving a discount.

17. Slowly and gradually increase the pricing of your products or service. If the original value was $75 and you reduced it down to $55, add one more discount level at $65 before raising your price back to $75 again.

We hope you enjoyed these psychological pricing techniques that may help you with selling your products and services. Comment below.
Spread the love

Comments are closed.