Training: The Psychology of Pricing (Tutorial) | Tuts+
Do you want to know how to price your products more effectively?
Choosing the right price is a common problem for business owners, particularly in new or rapidly-changing fields, where prices are not set in stone. A popular approach is just to copy or try to undercut your competitors, but there are smarter ways.
Academics have done a huge amount of research into how consumers respond to different types of prices. Some of the results are distinctly counter-intuitive, and by equipping yourself with the right data, you can profit from some interesting cognitive biases. Did you know, for example, that reducing the number of syllables in the price you quote can make people think they’re getting a bargain?
Paying a little attention to the details of pricing could make a big difference to your bottom line. McKinsey & Company has estimated that fewer than 15% of companies do systematic research on pricing, and yet studies have shown that small variations in price can raise or lower profitability by 20% or more.
So in this tutorial we’ll take you through some key findings about the psychology of pricing, and show you how you can use them to set your prices. You’ll learn how to reframe the value of your products or services, how to use price anchoring, how many options to offer your customers, and how to profit from some strange numerical quirks.
Read complete article here:
Subscribe
If you enjoyed this article, subscribe to receive more just like it.
