The psychology of pricing: 4 methods to sell more
The expression, “Psychological Pricing”, is sometimes described as “strategic”. In fact, it is simply the tactical use of researched findings to maximise buyer acceptance of price while minimising psychological resistance. In other words, presenting the price in the most acceptable way as possible. Check out our 4 pricing tips that have been psychologically proven to sell more.
Price reframing is describing the price in different ways, rather than the total cost. For example, “Just easy payments $39.99 for four months” or “Lease this car for only $399 a month”.
A consumer research study showed that similarity costs sales because buyers experienced “analysis paralysis” where they could discern the difference between two brands, so ended up buying neither. (The control group bought more when the prices were different.) Prudent marketing pricing decision-makers might choose to capitalise on “price as a yardstick of quality” and increase their price. Others, with production cost competitive advantage, may choose to lower their price to promote trial and determine the price elasticity in their particular product category.
A number of research studies have reported that the simpler the presentation of the number, the less daunting the figure is found by buyers. For example, $1900 is less threatening to a reader than $1,900.00. There is a suggestion that simple expression and simple speaking secure the same outcome… so saying, “Just fifteen hundred” instead of “One thousand and five hundred dollars” also minimises the psychological impact of a high-ticket price.
Price anchoring is a form of theoretical mental pre-empting that “readies” thoughts around introductory information and provides a nominal point of reference.