Pricing tricks and strategies are designed to tap into customer emotions when making a purchase. Since more than 50% of American consumers feel guilty about spending money, it's important to use pricing tricks to assuage concerns.
The most common pricing trick used by retailers is ending prices with 99 cents. But this isn’t the only trick up their sleeves when pricing products.
Our Miami digital marketing agency experts will share with you the eight different types of tactics you can use to get consumers to buy and spend more on your business.
Ever wondered how you can influence your customers’ subconscious minds into buying more? Before we get to the details, there are the four main overarching pricing tricks you need to know about:
As a digital marketing agency in Miami, we’ve seen clients use some great pricing tricks. Below, we’ll share with you our clients' go-to pricing tricks to generate more sales for their small businesses. Maybe it will work wonders for your company too!
Prices ending in 9, 99, or 95 are called "charm prices". They can make your prices appear more affordable than they are. Although a 1-cent difference in pricing may not seem much, consumers perceive a big difference and even think they’re getting a bargain.
Since people read from left to right, they’re more likely to perceive that your pricing is more affordable or reasonable when it’s $3.99 instead of $4.00.
A study by professor Robert Schindler of the Rutgers Business School revealed that this pricing trick has a significant effect on increasing sales. He said that products with prices ending in .99 sell much faster than those ending with .00.
In fact, people won’t perceive much difference in price between a $10.00 and a $15.00. But when you drop the prices of each item by 1 cent, consumers strongly believe that there’s a huge difference between $9.99 and $14.99.
What’s amazing about this pricing trick is that it works on almost anything, from t-shirts to accessories to cars and even houses!
Pricing that ends in 4 or 7 also tells consumers that you have seriously considered the price and that your items are being sold at or near cost.
If you’ve noticed, restaurants don’t really put a dollar sign beside the prices of the items on their menus. This is to keep people focused on the dining experience instead of the cost of the experience.
According to a study conducted at Cornell University in 2009, guests who received the menu without the dollar signs spent significantly more compared to those who received a menu with prices showing dollar signs.
If you have a physical store, you can apply the same tactic to your business. Instead of adding a dollar sign to your prices, just mark your items as “19.99” or “20”. This way, consumers won’t associate the amount with money and think less about how much they’re spending on your business while shopping.
The brain is incredibly good at making simple choices but less good at making complex ones. Although you don’t read a price out loud, your brain does. And, the more syllables your prices have, the more energy it takes for the brain to process the amount, and the higher the price seems.
Consumers are more likely to abandon products with complex pricing but are attracted to items with simpler pricing and are more likely to buy them.
Commas, decimal points, and digits after the decimal point make your prices longer and seemingly more expensive. By getting rid of these extra characters, you make it incredibly simple for consumers to compare items and identify which product is cheaper or better.
Here’s an example: Instead of pricing your products at $1,524.00, price them at $1524 instead. The simpler version is the price that your customers are more likely to buy.
Our Miami digital marketing agency experts suggest that you should also consider using phonetically shorter prices. Turns out, the brain processes the auditory version of prices, and the more phonetically longer an amount is, the more expensive it appears to consumers, even if the two prices have the same written length.
Consumers prefer to buy more if they feel like they can make a bargain or a deal out of doing it. This is why you can see retailers pushing for deals like “buy 5 for $5”.
It's an effective way to get your customers to buy certain items in bulk even if in reality they can just buy 1 for $ 1.
It’s not always that consumers are looking for the cheapest options available. Sometimes, they want products of better quality. And, in people’s minds, high-quality products have rounded prices. However, they still don’t want to overpay and are looking for the best prices in the market.
So, instead of ending your prices with .99, round your prices up! Just make sure that you communicate your prices in a way that makes consumers feel like the price is just right for this item.
Here are the instances of when you should round up your prices:
When you limit the number of items each customer can buy, it makes shoppers think that your product is in-demand, scarce, or that its price is really low. As a result, your customers end up buying more than they normally would avoid missing out on.
Promos that offer something for free are incredibly popular among consumers. They’re a great way to make your customers try out other items. They also add value to your products and help create positive feelings towards your brand.
Promos that offer something for free, such as Buy 1 get 1 or free shipping deals, also motivate your customers to buy more and talk about it with their network of friends and family. This can create a buzz around your business.
Studies show that free shipping deals have a greater impact on the value of a promo compared to a discount of equal value.
This is why more people would rather choose to buy an item that costs $49.99 but with free shipping rather than an item that costs around $44.91 plus $5.08 standard shipping.
When it comes to freebies, people are too captivated by the concept that they fail to evaluate these kinds of offers rationally.
A phase-out discount is when you put an item that is originally priced at $99 on sale for $79, and then you price it at $89 before bringing it back to its original price. Doing this creates a false sense of urgency in consumers and a higher willingness to pay.
When people can see that they can get a huge discount if they shop on the first day of the sale, a lot of buyers will make a purchase even if they didn’t originally have the intention of buying.
People who missed the first day will shop on the second day of the sale to make sure they don't miss their chance again.
The experts at our Miami digital marketing agency suggest that you use this tactic to quickly drive more sales.
The right pricing trick for your business depends on your industry and ideal customers. Don't be afraid to experiment and see for yourself which pricing method your customers are most responsive to.
You can use the tips we shared above to help you generate more sales, get your customers to try products they wouldn't normally purchase, and bank on a consumer's urge to buy on impulse!
Digital Resource is a digital marketing agency in Miami that specializes in helping small businesses succeed online by increasing their visibility on search and generating leads that will convert them into customers.
Want to make more sales online? Contact us today for a free consultation!