Use Pricing Psychology to Grow Your Business

I find psychology fascinating and have applied?many of its principles?to my?business?marketing efforts?over the years.?You may already use pricing psychology to grow your business without realizing it.?A lot of business owners do!??

Keep in mind that not all pricing psychology options apply to every business! Carefully consider which ones might work well in your industry.?As you?read?the examples provided, I am certain you will recall?instances?in which?pricing psychology has?affected you?as a consumer.?If so, then it is proof that this style of marketing works!?

There?are?so?many ways to apply the psychology of pricing. In fact, there are?more than I?can?cover?in this blog. But?I am going to share a few?of the most common?ones.

It Just Makes Cents?

One?method?involves?changing?the last digit of a price?to a 9 instead of a 0. Research has shown that?most consumers?perceive $1.99 as significantly less than $2.00.??

In other words,?a consumer’s?brain?analyzes?the 1 and equates it to $1.00.?Because of this,?they?interpret the savings to be?even?greater?than it?is.?And in?some cases,?sales numbers increase by?merely setting the 9’s to a smaller font size!??

As a rule,?we as consumers?are constantly looking for the best deal possible, even if it is by just a penny.?Have you ever used this pricing method?

Simple?Change?

Another strategy is to do just the opposite of the previous example. It?requires?setting all prices to end in 00.??

Consumers can more easily interpret and process the value?if it ends with a 0 – even more so if it ends in 00.?And psychology?tells us?that most?consumers?“feel” better about a 0 than any other number.??

In this technique, simplicity rules.?And?it is always great when you can keep it simple, right?

Double?Down

One technique that I know you are familiar with is?the?buy?“X” and?get?“Y”?free?style of?marketing.?The strength of this strategy is… well, greed.??

The?consumer wants to believe they are getting the best value for what they spend.?And the appearance of getting something for nothing invokes a feeling of victory for the shopper, encouraging the purchase.?

I know I am not alone when I say this one has worked on me several times!?Do you get?a little excited when?you?see?the?BOGO?acronym?(Buy One-Get One)?in an advertisement??

Time?“Cents-itive”?

Another concept that is used frequently in pricing psychology is time constraints. The most popular is the “1 Day Only” strategy.??

Many consumers like to analyze a potential purchase. They want time to consider if it is the best value?and?whether?they?want?or need the item or service.?By applying a limited time to the price, consumers are more likely to react quickly.??

In some cases,?even if you are?hesitant?about the purchase, you?may be convinced to make an impulse buy?with this marketing technique.?You?do not want to?miss?a great deal, right?

Change?It?Up?

One marketing strategy that many companies use?frequently?is?a?comparison technique.?It?involves putting two items next to each other?that seem comparable?but with different prices.?

Much like other concepts of pricing psychology, this one triggers the idea, “Why should I get THAT when I can have THIS?”?This can work two ways.??

The first scenario involves making the lower-priced item extremely attractive based on the?“amazing” cost?by comparison. The second scenario draws attention to the higher-priced item by pointing out the benefits of it and pricing it just slightly higher than the comparable product.

Summary??

As I discussed in?the?February blog, communicating confidently in your business is?an essential?facet?of your overall success. And having confidence in your pricing structure is?particularly important?to the growth and profitability of your business.?In a nutshell,?know and charge your worth!??

Once you have a Ladder of Services established with a solid?pricing structure, you can more easily play around with a few of these marketing strategies.?I would love to hear from you about?any success you find by using them (or others)!?

Overwhelmed?trying to figure out your pricing strategy??You?do not?have to figure it out alone. Sign up for an?introductory business strategy call, and?I will?help you make decisions on the next steps for you and your business.??

Hop into one of my private FB groups, the?Interior Design Business Forum?(for Interior Designers), or?The Coaching Hot Spot?(for online Coaches and?Consultants)?to get my daily inspiration, lessons, and thoughts. Let these communities help you become an actionable entrepreneur!!?