Looking for a great way to boost sales? Psychological pricing could be the key to getting the results you crave.
High street stores have been utilizing psychological pricing for decades. Not only is it easy to do, but it’s also extremely effective. Here, we’ll look at some of the best psychological pricing tips you can follow to start driving more sales.
It’s All about the Numbers
Did you know that a large part of psychological pricing is all about the numbers? Reducing the last number by just 1 can make a huge difference to how well your products sell.
High street stores are particularly clever at using this psychological pricing tip. You’ll often see goods priced something like $27.99 instead of $28. Why? Because that 1 cent difference makes it look a lot cheaper than it actually is. Customers are much more likely to purchase something if it ends in 9 or 7.
Offer Something for Free
Another clever psychological pricing tip is to offer something for free. Consumers love getting something for nothing. Even if they have to make a purchase to receive a freebie, they’ll still want it. This is a clever way to get customers to buy something they previously weren’t considering.
It could be a “buy one get one free” offer, for example. Or, you could offer a free eBook with a purchase. Another freebie option is to offer a free trial of your product. As long as it’s great and provides value, the consumer is more likely to purchase the product after the trial period ends.
Consider Prestige Pricing
You don’t always have to focus on freebies and cheaper pricing to draw in customers. In fact, prestige pricing can often work just as well.
With prestige pricing, you’re effectively setting a high price for your product. This gives it a more exclusive and luxurious image. It works in the complete opposite way to using 9 and 7 numbers. If your product is priced at $100, rather than $99.99, it gives it a more valuable image in the customer’s mind. So, if you’re trying to target high-paying customers, prestige pricing tends to work well.
You could also offer your product in payment installments. When a customer can spread the cost of a purchase, it makes them more likely to invest. This is down to two factors.
Firstly, payment installments can work well for those trying to budget their money. They may not be able to afford the full amount but could commit to a lower upfront cost. Secondly, it sounds much better to pay four installments of $25 than it does to pay $100. So, this is a great tip for increasing the amount of sales you make. Psychological pricing really can work if you do it right. The above are some of the best tips you can follow to make this pricing strategy work for you. You may find it a good idea to experiment with the different tips above. . Some will work better than others depending upon the types of products you’re offering.
What You Can Learn from Your Competition
When you’re trying to decide how much to price your products, there’s a lot you can learn from your competitors. While ultimately several factors will impact how much you should price your products, your competition can certainly help point you in the right direction.
Here, you’ll discover some key information that you can learn from your competition and how it can help you to determine the right pricing strategy.
How Much Are They Charging?
The first thing you can learn from your competitors is how much they are charging for similar products. Now, it’s important to compare at least three different competitors here. This will give you the best idea of the average price your product type sells for.
It’s important to not just look at the overall price. You’ll also need to look at what customers get for their money. Are their products different to yours? Do they offer the same things? If not, this needs to be taken into account when you’re comparing their prices to the ones you are considering.
So, while you shouldn’t use your competitors’ pricing as the only reference for how much you should charge, it can definitely help narrow down a figure. Pay attention to any discounts they offer, alongside any tiered pricing models they might include.
You could also see whether they are offering any new pricing models. There may be a way of pricing your products you hadn’t considered.
What Aren’t They Offering?
You can also learn a lot by looking at what your competitors are not offering. This gives you the opportunity to capitalize on the gap in their services. If you can offer what they don’t, you can charge a more premium price for your products and services.
If you’re struggling to determine gaps in their products, take a look at reviews for the company. You’ll often find that customers recommend improvements within their reviews of a business. So, take a look and see what customers aren’t getting from your competitors and use this to your advantage.
Look at Their Financials
OK, so you aren’t going to be able to see full financial records. However, you can get an idea of your competitors’ finances. Many provide reports on their spending, especially how much they’re spending on marketing. You’ll also be able to see how much profit they are earning.
As well as that, you can look at any paid advertisements they’re running and see how effective they are. Understanding how much they are spending on marketing will give you an idea of how much you should be spending if you want to see the same level of results.
There is a lot you can learn from your competitors. While you shouldn’t focus on simply offering a lower price than them, you can use their pricing structure to influence your own.
The above are some of the main things to compare and look into when researching your competitors. When done correctly, competitive pricing can really drive sales and push your business ahead of the competition.