The psychological of pricing
what do you need to know about how to price your products to the customers?
I think many of the business owners don't think seriously before about the meaning behind pricing, and why the owners need more knowledge of the pricing methodology.
To price your products you have to be studying many things before you stick out the price tag on your product.
This article is for anyone who has a commodity for sale. Whether it's actual items or services.
Today, we will peal up on the main points that we need to be considered before we hang the price tag out.
1. Left digit reduction: For the past few decades, the marketing world has been inundated with charm pricing—prices that end in 9, 99, or 95.
2. Fewer syllables for price Number: Don’t overlook the auditory version of your price. It may seem irrelevant, but syllabic length influences price perception.
3.Use small font to display price: Your brain has a universal conceptualization of size. Thus, there’s a blurred overlap between VISUAL size and NUMERICAL size. That’s why customers perceive your price to be smaller if you display your price in a smaller font size. In a layout, position larger elements around your price. Those elements will reinforce a smaller visual magnitude, which will reinforce a smaller numerical magnitude.
4.Remove the comma from your price: Researchers found that removing commas (e.g., $1,499 vs. $1499) can influence make your price to seem lower.
5.Use words that are related to small magnitude: Be careful when choosing the language near your price. Certain words can taint people’s perceptions. For example, presented participants with various descriptions for an inline skate. Some descriptions emphasized a “Low Friction” benefit. Other descriptions emphasized a “High Performance” benefit.
6. Separate the shipping and the handling: If You sell products online, you should usually separate shipping and handling fees.
7. Offer payments of installments: Likewise, when you give people the option to pay for your product in smaller increments (rather than one lump sum), you anchor people on the smaller price.
8.Mention the daily equivalence: Similarly, you can reframe your price into its daily equivalence (e.g., $0.87/day). That framing influences people to perceive a lower overall price. You should still make your regular price the primary focus. Simply mention the daily equivalence. That low number will anchor people toward the lower end of the price spectrum.
9. Be precise with large prices: Thomas, Simon, and Kadiyali 2007) analyzed 27,000 real estate transactions. What did they find? Buyers pay more money when prices are specific (e.g., $362,978 vs. $350,000). Is it because of the negotiation aspect? If someone asks for a very specific price, wouldn’t buyers perceive less room to negotiate? That’s what I thought. But nope. Researchers ruled out that possibility. Surprisingly, the real culprit involved priming a small magnitude.
Nothing in this universe is born absurd. everything around us is made after much research, discipline, and try the wrong, right things.
Sometimes I feel I am fortunate because I came after generations that they paved the road for us to move easier.