I like to think I make rational choices. When I need something, I buy it. I don’t spend too much and I never buy things I don’t need. Never.
I also do not get suckered by silly ploys like: $99 (Hello! That’s $100), or “One-Day Only Sales.
Nevertheless, we humans are completely irrational beings. Even if I want to deny it, the persuasive power of selling is irrefutable. But you can leverage some of the zany, silly and downright crazy psychology behind how and why we spend money and put it to work for you (and your business).
Let’s dive in to three common pricing psychology tricks that are proven to make you more money.
1. Always show three choices
Imagine a quick visit to the drugstore because you ran out of shampoo. There’s a bottle of store brand shampoo that costs 99 cents, a bottle of fancy Frederic Fekkai shampoo for $16 and a bottle of good Garnier Fructis shampoo that costs $7.
Chances are you, like the Goldilocks you are, will pick the Garnier Fructis, a.k.a. the one in the middle.
This phenomenon of three choices — a low-priced option, a medium-priced option and a high-priced one — is a well-known psychological pricing trick. Once you look for it, you will start to see everywhere.
The idea is that budget shoppers will choose the lowest price option. Customers looking for top service will choose the most expensive option and the rest of us will choose...the middle option.
When you offer your customer or client three options, be sure to present them side by side. If you assume that the middle-priced option will be the most frequent purchase, you can even create a “bare bones” cheap option and a “white glove” expensive option (for example, by adding dedicated customer service) to easily create your range.
A quick review of some popular startup startup subscription services will show you that they are all hip to this game. There’s a free version, an expensive VIP version and a “most popular” middle-of-the-road option.