4 Psychological Pricing Strategies To Help Your Business Spike Sales and Profits… Even If Your Products Are 3x More Expensive Than Your Competitors!

8 Mins Read

Why do some business owners experience poor sales…

 

Despite lowering their prices and offering cheap products?

How is it possible that you can triple your prices, and still amplify your sales… without adding any extra value to your products or offers?

What is 1 simple psychological trick that business owners can use to manipulate their pricing…

 

To Instantly Gain More Happy, Paying Customers!

 

 

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[Image Credits:]

 

These questions above will be answered in this article. But that’s not all…

You’ll also be discovering:

  • How a popular Airline company uses pricing tactics to make their customers feel excited and happy to buy from them
  • The persuasive power of “Choices”… and why giving people more choices can actually boost your sales
  • A simple trick on how to gain commitment from potential buyers… and make it hard for them to say “No” once you do this
  • Why introducing a lousy and inferior product or service can actually help to boost your sales… almost instantly!
  • Pricing tactics to handle customers not being able to afford your products… and… how you can get them to pay you EVEN MORE MONEY than what the product originally costs!

Are you ready? Then let’s move on to…

 

Pricing Strategy #1: Three-Pronged Pricing

Here’s an example of three-pronged pricing in action:

 

 

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[Image Credits:]

 

One of the best ways to gain more sales for your products and services… is to introduce three-pronged pricing.

That means, having at least 3 options for your customers to choose from.

Why?

 

Few reasons:

  • When people have choices, they feel more “in-control”, and they don’t feel like they are being pressured to buy. This increases chances of making a sale
  • Having a few options allows them to compare and contrast what they are buying, making them feel more comfortable
  • When there are 3 options… most people usually choose the middle option, because they have a fear of getting the extremes

 

 

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[Image Credits: http://kopywritingkourse.com]

 

In fact, here’s how most people think when presented with 3 different product packages:

 

 

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[Image Credits: http://kopywritingkourse.com]

 

  • They probably won’t settle for the cheapest option because it’s perceived to be low-value
  • The most expensive option appears to be too expensive and too much! However…
  • Once in a while, you’ll chance upon a premium customer who is willing to buy this from you. That is the good thing about having an expensive option.
  • In most cases, customers will usually choose the middle option because it feels the “safest”, and there is nice blend between value and price.

 

Learning Lesson:

“When there are at least 3 options to choose from, most people would select the middle one.”

Hence, find ways to create at least 3 different product packages for your business, and…

 

Put Your Most Preferred Package In The Middle.

You’ll see your product sales increase for that option!

 

Pricing Strategy #2: Decoy Pricing

The name here speaks for itself:

 

DECOY.

You’re using a decoy to give customers a stronger reason… to buy more of your products and services.

Want to see how a famous airline uses this strategy?

 

*HINT: Many Singaporeans Have Been Exposed To This Strategy Before

 

 

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[Image Credits: Jetstar.com]

 

When you go to Jetstar.com to book your flight tickets…

You’ll see this pricing option asking you to select your check-in baggage preferences:

 

 

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[Image Credits: Jetstar.com]

 

Did you see it?

Look closely…

The difference between the 15kg and 20kg baggage option is only…

 

A Measly $1!

 

This was what went through my mind as I was buying my flight tickets, and came across this:

  • “Hmmm… I don’t think I need check-in baggage for this trip. But still, let me see what options they have”
  • “Okay, I have to pay $27 for 15kg of check-in baggage. Hmmm…”

“WAIT! What is this I see? Did I see this correctly?”

  • “OMG. They’re offering 20kg of check-in baggage for only $28? That’s only $1 more than the previous option!”
  • “Okay, now this check-in baggage option looks very enticing. I think I’ll just get it”

 

Now, That Is The Real Purpose Of Decoy Pricing:

It makes your offers look more enticing, and thus increases sales of your current products…

Even if you do NOT add any extra value to it.

Here’s another example:

 

 

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[Image Credits: Apple.com]

 

Look closely at the prices for the 16GB and 32GB iPod Touch.

 

Here’s what Apple did on purpose:

  • They made the 64GB iPod Touch the most expensive, to establish a clear difference between the variations
  • It made the 32GB iPod Touch the EXACT SAME PRICE as the 16GB one
  • This make the 32GB model more enticing, and increases sales of it because customers now feel like they are getting a good deal.

 

This Is Psychology At Play Here!

If you are able to create similar product variations for your business…

 

You should give this strategy a try, either by:

  • Introducing a slightly inferior product, at the same price… to boost sales of the original product (that is better)
  • Introducing a slightly better product (with a LITTLE more value)… with just a TINY increase in price (similar to how Jetstar does this!)

 

 

Pricing Strategy #3: Free Trial… Continuity

This strategy is great if you have products or services that run based on a continuity model.

Rather than getting the customer to pay you a monthly fee right away…

 

Give Them A FREE Trial To Secure Their Commitment First.

 

This Makes It Easier For Them To Say “YES” Later… And Harder To Say “NO”!

Here’s an example:

 

 

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[Image Credits: Scribd.com]

 

Here’s how it works:

  • Scribd.com offers users a huge collection of books to read and download.
  • Rather than having to buy books… all users need to do is pay a monthly membership fee, and they can access these books anytime they want.
  • However…
  • Scribd offers a FREE 14-day trial to all new members, to let them have a taste of the benefits they experience when they get a membership

 

 

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[Image Credits: Scribd.com]

 

As you can see…

Payment only starts after the FREE 14-day trial.

 

 

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[Image Credits: Scribd.com]

 

There Are A Few Benefits To This Pricing Strategy:

  • By letting users join FREE as members, you are getting their commitment fast… because they don’t have to pay anything for it. It makes this decision “idiot-proof” for them.
  • After they commit to it… they can then experience the benefits, which hooks them and increases the chances of retaining them
  • Because they are now committed, the chances of them saying “YES” to the monthly subscription is a lot higher… compared to asking for their money from the start

 

Learning Lesson?

First get their foot in the door… Give value to them first…

Then sell to them last.

 

Pricing Strategy #4: Not Enough Money? No Problem

Very often, you may face this situation:

A potential customer looks through your website and offer…

 

He Or She Loves What You’re Selling, And Wouldn’t Mind Buying Your Product Or Service. But…

  1. They either do NOT have enough money to buy at the moment
  2. They have other priorities that require cash, and your product or service comes in secondary to them
  3. They feel uncomfortable forking out so much money… at one go… to buy your product or service

 

How do we overcome this?

As business owners, we always want to give our customers multiple ways to sign up.

We don’t want “lack of money” to ever be an issue, and that is why we offer…

 

“Multiple Payment Plans”!

Here’s an example:

 

 

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[Image Credits: http://barrecode60days.squarespace.com]

 

After establishing the value of their fitness programs and classes…

 

They offer customers 2 ways to make payment.

  • You can either make a one-time payment of $397, or…
  • You can make 3 payments of $147 each!

 

This allows customers to get on board the program…

Starting with just a small payment of $147!

 

There Are A Few More Benefits Of Offering Multiple Payment Plans For Customers:

  • When you give customers a choice, it makes them feel more “in control”. They don’t think you are forcing them to buy, so it increases your chances of making the sale.
  • You can get customers to commit more easily and quickly… because the upfront payment is a lot lesser. For example:

 

 

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[Image Credits:]

 

Getting the customer to pay only $57 is a LOT LESS SCARY… than asking for $147 from them right away!

  • With smaller payment plans, you actually earn more money from customers in the long-run because they pay more. See the example below:

 

 

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[Image Credits:]

 

This is what it means to make MORE money from customers… in the long run…

Even if they do NOT have enough money to pay you right now!

 

How Awesome Is That?

That is why you always want to offer multiple payment options to potential customers

So that even if they do not have enough money right now…

It’s not a problem!

 

Conclusion

Remember, charging lower prices will not equate to higher sales for your business.

In fact, very often, customers usually use references and comparisons to make their purchase decisions.

That is why these above pricing strategies are useful for business owners who want to boost sales, because…

 

They psychologically influence customers to feel happy with buying your products and services!

Even if your offers are more expensive than your competitors…

Introducing a decoy option could help you secure more customers.

 

Even if your product or service is not as high-value as other businesses…

You can still lock-in a good number of sales when you offer a FREE trial (followed with continuity), because it gets customers to commit with ease.

As you can see…

These pricing strategies make your products more valuable in the customer’s eyes.

So apply them in your business today, and watch your sales soar to greater heights!

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