Pricing strategy has always been more akin to a game of poker than a science. Theodore T. Moran
At some point, you’ll need to set a price for your offering, whether you’re selling a product or service. Many e-commerce shop owners slap a pin on a price and hope for the best since pricing things isn’t always simple or evident. However, the process has to be given a bit more consideration since, in online sales, understanding how to conduct effective promotions and set prices intelligently is vital to success. Psychological pricing is an intelligent technique to price your items or services to influence or convince customers when purchasing. We know that consumers have a natural tendency to react to particular sorts of prices. The following five suggestions can help you encourage your clients to make larger purchases from you:
1. Give something away
Even though it is common knowledge that there are no free lunches in the real world, there is evidence to suggest that BOGOF promotions affect consumers’ purchasing decisions. Free is a very persuasive term that works to persuade clients to purchase even if they had no intention of doing so. You may draw in more business by making an offer, like buy one get one free. You may also provide free delivery like Amazon does with its Amazon Prime service. Your consumers are encouraged to complete the transaction since they are confident they won’t have a nasty surprise at the register. You often see “33% more” on cleaning and food goods containers. A 33% cut off the product’s price sounds better in our minds than a 33% increase in value. Because consumers prefer to obtain more for the same price rather than a reduction on the product. In essence, you are getting more deals for the exact cost.
2. “Enchanting” No. 9
Numerous studies have demonstrated—pretty obviously—that customers, on the whole, prefer to spend less for goods and often link prices that finish in “9” with discounts and deals. Nowadays, practically all internet pricesendh in.49 or 99. Psychologists refer to this as the “left digit effect,” When customers prefer to round down rather than up based only on the pound/dollar figure when the price isn’t a round figure, it might give the impression that the item is discounted even when it isn’t. For instance, if you price an item at £49.99. The buyer will perceive that pricing as £49.00 rather than moving up to the “next level” £50.00 price range. You may attract customers who might not even be seeking a bargain by capping your cost at 9.
For this reason, businesses like Apple will charge $1299.99 for a laptop rather than $1300. The sales volume is positively affected by that $0.01, which is unexpected. By setting the price at $1299 rather than the higher “$1300” range, the product seems more affordable than if sold for $1300. Apple seldom (if ever) offers discounts on its products. Apple uses this approach across all of its product lines. The solo effort Apple makes to make its goods seem more affordable is using this method. Take a page from Apple’s wildly successful playbook to boost your online sales.
3. Use erratic pricing
Prices for pounds that finish in 5, 7, 8, or 9 are considered odd pricing. This pricing gives the impression that you, the shopkeeper, thoughtfully determined the item’s price. This pricing technique gives the impression that the goods were marked down to the lowest price to provide a fair price for the consumer and the store. Instead of charging £10, prices like £9.95, £9.97, £9.98, and £9.99 are utilized. This method also applies to product discounts; lowering a product’s price from £49 to £38 is far more effective than from £49 to £40. When releasing a new product, experiment with strange pricing. To determine which works best for you, use two distinct price points: one with odd pricing and one with an approximate price. The former is more often the case.
4. Examine comparison shopping
The price of one offer is directly compared to the cost of another offer in this ingenious marketing strategy. Another term for this is “anchoring,” which describes buyers’ propensity to primarily depend on the initial information provided and base their purchase choice on this. According to The Wall Street Journal research, Williams-Sonoma had a $275 bread machine in their catalog that wasn’t doing well with customers. Sales of the $275 bread maker almost quadrupled when a $415 bread maker did. That was comparable, but slightly better was released and put next to it. Develop a tiered product approach to take advantage of the reality that your consumers don’t make choices in a vacuum. Consider using comparative or anchoring pricing when introducing a new item or service. Customers in the Williams-Sonoma case may have reasoned that they were getting a good bargain if they could get the $275 model, which is almost as excellent as the $415 model. Positioning your product lines should take into account comparable pricing. See whether your “regular” product sells more by introducing a more “premium” version.
5. Quality Products Always Come at a “Premium” Price
When Apple items were far more costly than comparable products, you may have felt your friends and family were crazy to spend so much on the newest technology. Maybe you’ve since had a change of heart and come to see that paying extra for something makes you value it more. After all, they wouldn’t charge so much for it if it weren’t exceptionally better, would they? Consumers often connect price with quality. Thus practically any industry may benefit from this pricing approach. Even if you’re asking £100 for a T-shirt, it could sell just as well as one for £20. Could you test it out? In the eyes of your consumers, pricey is good.
Try out various price points.
So now that I’ve given you a few psychological pricing suggestions, perhaps you’ll think it’s a good idea to incorporate one or more of them into your e-commerce sales. Always experiment with pricing for your new or existing products, and remember that your customers’ buying habits may change over time.