Okay.
In this section now we're going to be looking at pricing psychology tips.
Tips and tricks in order to make your pricing efforts for sales and marketing even stronger, make them
convince the customers even more.
Now, I've made a list of all of different points here, and I could go through them with just text,
but because I believe that it's best learned by having them visually from the customer's perspective.
I have created a sheet here where I will explain one by one these different principles.
So let's get going with the very first example.
So let's say you're offering a kind of, let's say a software, all right?
And right now you're charging it per year and you're charging it 299.90.
So you want to be making, based on your analysis for pricing and positioning, you think the software
for 300 a year is a good point.
Now you have it framed right now as only $300 to 99.
90.
Of course, per year.
How can you make that same offer, get the same the same amount, but convince the customers that it
is a better offer?
So the first thing you can do is to break it down into smaller units.
So you will see that we have gone here.
If you break it down per month instead of year, we're going from a value of 2.99, 92, 24.90.
Now, you may say, well, we're illogical.
Obviously, you know, people will see two 9990 is the same as 2490.
But customer psychology, especially for pricing, is irrational.
The way that our minds work as buyers is irrational and we do not judge things accurately.
And pricing psychology is all about leveraging those techniques that even for the same offer, you're
going to make the customer feel like for the same price.
There is more value.
And remember value is in the eyes of the customer.
Anything is worth what the customer is willing to pay for it.
So the more you can convince them that the price is low, or alternatively there is more value, the
more your your offer is going to be strong, the more likely you are to convert.
So here we've already gone from a big number, so 29, 92, 24, 90 or you can do it.
Alternatively saying five installments of 5990 over the year.
You can also use the word small here because any kind of word that is suggesting small when it comes
to price, you want to be leveraging that for the small price for the cheap price.
Tiny Anything that describes small when you talk about the prices, it will influence your customer
subconscious to feel like, oh yes, this is a small, you know, 59, 90.
Yes, it is small.
I mean, it depends for whom.
But if you already primed them to think it's a small installment, then by the time they come to read
the price, they already are more likely to feel like 59 and 90 is a small amount.
Now you can make this even better by put framing this in a low cost item.
For example, a coffee cup.
So 2490 can be a lot, but all it is is five large coffee cups a month.
And because a coffee cup is seen as something being cheap, then already five times something very cheap
every month, you know, that's like one, almost one cup of coffee a week, right?
That's all it costs.
One cup of coffee a week.
Now, if you already compare this with $300 per year, you already see how this offer seems a lot more
affordable.
And one cup of coffee a week or, you know, 1 or 2.
It's nothing, right?
It's not very much money.
And yet, you know, it's still we're still asking for the same thing.
So this is how you price it.
And then to make this even better, one little trick you can do is frame it in an item that is a sort
of, let's say, guilty item, something that people buy but they wish they didn't.
So, for example, there was a good example, for example, for a yoga business, right?
If you wanted to do a membership for yoga business, then you can frame it in ice creams.
Why?
Because then it comes as a substitute.
Because if you want a yoga, if you want, you know, to have a good body, then when the customer is
buying an ice cream, they feel bad.
So they want they buy it, but they want to get rid of that.
And so you're saying here, hey, you know, that bad habit you have of eating those ice creams?
Well, for the price of that, for the amount of money that you're putting into that bad habit, instead
you could have a membership to that thing that you really want.
And it's a small price for just those five ice creams a month.
You're getting your membership and you're going to have the body that you want.
You're going to be training, you're going to be.
Resting.
And this is how you can frame it.
See, this is how you go from $300.
Whoa.
That's a lot.
I mean, for a year.
But I mean, $300 is a lot.
Oh, it's just the small price of five of these things that I want to get rid of anyway.
This is how you do it.
Now, here are some more pricing tips when it comes to just displaying the product, the price and the
discounts.
So here you can imagine it's any kind of product, right?
This is a standard display where you have the product and then the price in 90 or 99, you know, typical
pricing psychology thing, make it a single unit smaller and it would seem smaller.
So how can we improve this?
And also let's have a variation on it where you're breaking it down and you're making breaking the cost
in the shipping.
This is already somewhat better because instead of having the product for 2399, the product is now
99, 99.
But you see here you've got the shipping and the shipping is really visible.
So that has limited impact.
How can we make this better?
Well, one thing you can do is have the full price, but then really highlight in a big font that you
have free shipping.
What it does is that instead of the customer seeing one, you're getting one benefit for that price.
It sees two benefits.
So it's paying 2399 for the product plus a free shipping.
It's getting two things.
And again, customer psychology is the way the brain works is it adds the different benefits and then
compares the sum of these benefits with the total price.
So here you're getting in the customer mind's eye.
Two things for the price of one, of course this thing is worth less and the customer makes a mental
note of that.
But still, this is already better than if it was not given or if the pricing was to pay.
Because here what the customer sees is I have to pay once and then I have to pay extra.
Not so good.
How can we make this better if we want to break it down with shipping costs?
What we can also do is then make the funds smaller.
So a smaller fund means a smaller price in the mind of the customer.
It's not logical, but that's what the studies have shown.
When you make a price small, then it seems smaller.
So if you are to if you have to charge for the shipping, then you can make it very small so that the
brain focuses on here's the product and it's 1999.
Oh great.
Oh yeah.
And there's just a little extra for the shipping, but you keep the focus on having a cheaper price.
How can we improve this even further?
If you have a product that can be split with some some options that you can options, but which aren't
really options.
So options that you know, the majority of the customers are going to need, then you can split that
out and then that this splits the price.
So that way the focus is now on the product and the product is now 1499.
So remember, we started here all the way, 2399 and now it's only 1499 now.
Yes.
Here's that extra option, that thing that you need with it.
Of course, you want to frame it in a way that it's not that obvious.
You need it make it seem more like an option.
But you have to know that people are going to want to choose that.
And then you make again a smaller font.
So it's only 44.99.
That's the thing.
It's an only it's small.
And then you can even have the shipping for 299 being again a small thing.
So here you have the main offer and then these are just small extras, which then the brain goes, uh,
well, you know, it's just small extra.
It doesn't, it doesn't cost as much.
It's better to break it down that way.
Now, what if we want to offer a discount on top of that, Right?
So what you want with the discounts is if this is the standard way it is done, you can see with with
just $5 off and that's the price in big.
Now, this isn't the ideal thing.
Firstly, what you want is to have a design that's more like this.
So again, the smaller the font, the smaller the the perceived price.
So if you have a big number like this, it can work sometimes depending on some industry, but generally
it's recommended to have it as a smaller, the smaller it is, the smaller it compares.
So you see we've got a big 23 and now it's a small 18.
So in the customer's mind, 1899 is going to seem quite smaller than 23in fact.
A research has shown that they even look at the proportion.
So the mind looks at how much smaller in percentage is this price versus this one, and then it will
be influenced by that.
So for example, if the price here, you see it's about, you know, 30% smaller than the mind will
automatically start assuming first that the price is 30% less.
And then what you want then is to highlight the how much it is off.
So you see here 20% off.
You don't want it to be so small, you want it to be bigger.
But also why 20% instead of five?
There's the rule that if you're offering a discount, then you want the number to be as big as as possible
because five is smaller than 20, so it's better to use 20 for your discount because then a customer
will feel 20% off is a bigger discount than $5 off.
The rule to know if you should use percentages or whole values is called the Rules of 100, which is
basically if you're offering any kind of product that is less than $100, then it's always going to
be worth using percentages.
If it's bigger than that, then the the whole values are going to be bigger.
And so you want to be using those instead.
Now, one more tip when you're offering discounts is to offer a reason for the discount.
The reason being that as customers, I mean, you can think of yourself as well.
If you see a discount, you're always going to ask yourself, well, is it really a discount or do they
just increase the price by, for example, 20%?
And now they're just saying, hey, we've got a 20% off to make it more believable that it is a real
discount and that it's not just a tactic, then you want to provide a valid reason.
So, for example, if it's for clothes, you want to have an end of season discount.
Now you don't actually need the reason to be right.
Okay, that's up to you if you want to go ethical sales or not.
But if you want to maximize, maximize it, then you just provide a reason that you know the customers
are going to see it as valid, whether it's real or not.
That's up to you.
Right.
But this is going to increase the likelihood that the customers are going to think, oh, all right,
this is a real discount.
It's not going to happen again.
I can trust it.
So now's a good time to go and jump on that opportunity.
Then if we apply what we've already looked at, splitting the prices, then you can go even further
and then do this so you have a discount and you bring the focus to the product is cheap and there's
a discount on top of that.
I mean, it's 1299.
What did we start with?
It was 23, 99.
Now we've got a discount and we're going all the way down to 1299.
How cheap is that?
Now, the good thing is that not only do you get the benefits yourself from having the breakdown, which
is going to make this price seem smaller, but you also offering a discount here where you are.
For example, here you're only losing $2, right?
Whereas if you were going here for the same 20%, you know, if you started at 23, then 20% of 23 is
a lot more than 20% of the 14.
But the good thing is because you're not discounting these optional things and the and the shipping,
then you're still offering the same discount, but you're not really discounting the whole thing.
And so you're making more money.
Another technique you can do, though, is you can also, if you want, discount also the option.
So that's why instead of offering the customer one discount, they're having two discounts or three
discounts or whatever number.
And finally, then you can also use the principle of scarcity and fear of missing out by stating that
the offer ends in a certain time frame.
So by having this limited offer, they are going to feel like, Oh, it's it's even bigger, it's a
bigger discount, but can only take it for a certain amount of time.
--, --, --.
I need to go and buy it now.
And so we can come to a product offer like this during discount time where you have the initial discount,
you have the justification, you have the biggest value that you can to describe the discount.
Then you show FOMO, limited offer or limited stock.
Only this number of units left, and then a small option for that thing that you know they're going
to need with a small price and then even offering at the end free shipping and you can say for orders
even over a certain amount so that you're further incentivizing them to afterwards commit to buying
an extra product so you can even say have some more options here, more clickable options that make
it go over the $20 level.
If you are offering several services or you have several pricing tiers, like a lot of SaaS, any kind
of software or even within the products, if you have if it makes sense for you to have it broken down
into sort of basic standard and deluxe edition, then you can follow these tricks.
Firstly, you want to leverage price anchoring.
So the process of price anchoring is simply that the first values that we see for any kind of offer
are going to influence in our mind what we believe is the standard price for it.
For instance, let's take again the barbecue set right.
You might not have an idea of what how much a barbecue set would actually cost, but if you go and look
it up on Amazon, then you will see that the first results are going to be 32, 26, 31.
And what happens in your brain or any customer's brain when you go through this is that you start developing
a scale, a price spectrum in your mind.
That's going to give you an idea of, okay, what's the average price for this item?
This could have been 15.
You know, it could if it was 15, 16 and 14.
Then afterwards, if I had seen the 32, 26 and 31, what would I have thought?
Well, I would have thought that the average price, the standard price was around 15 to 17 and 32 to
26, 31.
These are premium and too expensive.
But if instead first I am exposed to those 3020, around the 30, then afterwards, when I see those
that are 20 and less than that 18, then I'm going to start thinking, well, these are extremely cheap.
They're going to be probably of lower quality because in my mind, any customers mind lower price usually
corresponds proportionally to lower quality.
So the first prices that a customer is going to see is going to influence them.
And there's loads of research having been done about price anchoring and it's called anchoring because
it's sort of how the price is more or less being set, what the range is being set.
So whenever you have customers being exposed to your prices, make sure to try and prime them first
for a bigger number than what you actually expect them to pay.
So this is why, for example, in this good example, in this good example, I found you have first
the deluxe one being offered.
So deluxe, you don't actually expect many customers to go for deluxe and it is very expensive.
You can.
Well, it always depends, right?
But it is meant to be seen as very expensive.
So 1900 per month, that can be a lot.
But what happens is that when you already prime the customers to think, okay, our services if you
go for deluxe are very expensive.
Now if you then move to a standard 880, that's half the price, right?
And so what you want is to have the deluxe seem quite expensive to make.
Then the standard seem like much more of a bargain.
And usually as well, customer psychology has shown that we as human, we tend to go for the middle
option.
Usually so few of us tend to go for the premium option because it's too expensive.
Few of us tend to go for the basic option because it is.
It is not good enough.
It's not high quality enough.
Most people like to go for the safe option.
And the safe option usually, they say, is the middle one, which is why you always want your real
offer to be in the middle.
You want it to be you want the ones on the left and the right to basically be not so much of a good
offer so that it makes the one in the middle seem like so much better.
And you see here, what do they do?
They offer almost exactly the same thing.
Unlimited texts, unlimited active domain, same thing.
30 active, same unlimited active product, same 50.
Personalized instead of 100.
Okay.
Doesn't seem so bad.
Advanced post segmentation.
Same.
Same single sign on.
So for twice the price, all you're getting is 5050 more personalizations, whatever that means.
And then single sign on.
Why would you take this?
Right?
Why would you take the deluxe?
Of course not.
But the standard in comparison, it seems like a bargain.
You're getting the deluxe and for just a little bit less, it's only half the price.
Okay, that seems like great bargain.
That's what you want to do, right?
This is what you want your customers to think.
And the basic.
Well, 699 well, that's quite close to 880.
It's not it's not half as much.
Right.
So what are we getting?
A limited text?
Only five active domains.
Ten active goals.
Okay.
Now it's a lot less.
Five active projects instead of unlimited, only five personalization.
So went 100 to 50.
That was half.
Now it's you know, it's further divided by ten, ten times less basics post segmentation and only the
live log.
Well, when you think of that, I mean I don't even I don't even know most of what this means, right?
So I'm a perfect customer because I'm just judging from basic knowledge, but this seems like a lot
less and it's a lot less, but it's, you know, it's 700, so compared to 880, this is not worth it
either.
So then this option is out.
This option is out.
And it seemed that standard, which is also the most popular plan.
So this leverages the influence principle of social proof because that's what people are using.
Then it seems like this standard is exactly.
It's the best, it's the best value for money.
It is the standard, it is standard, it's the middle option and it's the one most people use.
That's the one that we're going to go for and that's price anchoring and price and product decoys.
These are what these two options are being called.
So if this is applicable for you, if you offer any kind of product and service where this can be leveraged,
definitely do that, offer this plan, and you will see so much so many more people are going to be
funneled toward taking the standard.
And the great thing is you're making this seem so much better without having to compete.
You don't have to compete anywhere.
You are just framing your offer to make it seem even better.
So.
There you have it.
That was it.
And then you have the description again here within the template so that you can always refer to it
and you can design.
Best price on your website as possible.