THE PSYCHOLOGY BEHIND PRICING
HOW DO YOUR CUSTOMERS DETERMINE IF A PRICE IS HIGH OR LOW?
Stanislas Dehaene, one of the leading researchers in numerical cognition, says there are three distinct and connected ways our brains perceive price – Arabic, auditory and analogue – and understanding how they work together can help you price products to appear more competitive.
OUR TOP TIPS FOR COMPETITIVE PRICING
Record your results and experiment with these tips to discover the factors influencing your sales.
CRAFT THE PRICE TO SEEM SMALL
Reduce font size and syllables
Using smaller font taps into the analogue way shoppers perceive price, while fewer syllables in the read word reduce auditory length.
Use descriptive words before your price
Place words like ‘tiny’, ‘small’ and ‘low’ next to your price; never say ‘high value’ as the word ‘high’ detracts from your ‘low’ message.
Divide prices into daily amounts
Make more expensive products like supplements and remedies appear cheaper by diving the price out to say ‘only $x a day’.
MAXIMISE COMPARITIVE PRICES
Use exact numbers for higher prices
We’re more likely to see higher prices as reasonable if they are exact. For example, use $58.12 instead of $60.
Position large quantity purchases right
For example, “30 tablets for just $10.99” allows shoppers to anchor on the high quantity (30), which makes $10.99 appear an attractive deal.
REDUCE PAYING PAIN
Emphasise the quality
Shoppers see prices based on material cost as fairer than those based on supply and demand. Emphasise product quality so customers think your profit is low and the deal is good.
HELP CUSTOMERS UNDERSTAND PRICES QUICKLY
Be clear and concise
Busy shoppers will spend more money and time in your store if they can easily understand prices and deals.
Get your rounding right
Rounded numbers are easier to process, however for rational purchases they can make prices seem artificially higher. So use exact numbers ($19.86) for rational purchases, and round for emotional purchases ($19).
DISCOUNT THE RIGHT WAY
Use percentages
Display prices under $100 as a percentage discount so the number will seem higher than the equal numerical value.
Save sales until the end of the month
Discounts are more attractive at the end of the month as budgets wear thin.
Test it out!
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