3 Product Pricing Hacks backed by psychology.
These simple tweaks on your website could increase your sales. If you're not thinking about people's cognitive biases when you're pricing your products. You're leaving money on the table.
Here are 3 things you can do today to increase your product sales…
- Price anchoring
Have you ever gone to buy a car and the salesman shows you something way out of your price range? Then the next car he shows you has similar features but it's less expensive? Or when you were buying a house and the realtor showed you a big fancy house that was WAY out of your price range. Then she showed you something less expensive but still more than what you would like to pay for. If she showed you the second one first it might not seem as reasonable to you.
That's price anchoring. If you show the most expensive package first. Your other packages will seem like a "good deal" in comparison.
The way you can use this on your site is to put the most expensive bundle or products first. If you don't have an expensive product make one. Not only will you sell more of your other products. You will have a certain amount of customers who buy the expensive thing. Because it's expensive.
- Charm pricing
Have you ever gone into Walmart and noticed everything's price has a 99 behind it? like: 4.99 or 9.99 the prices never have a 0 behind them.
That’s called charm pricing. It works pretty much the same as price anchoring. When your brain sees a number it processes that information fast. If there is smaller numbers behind the first number the first number feels bigger. But if there are larger numbers behind the first number. The first number will feel smaller.
Believe it or not, you increase perceived value if you price your product at $1099 vs. $1000. If you go on Apple's website right now you will see that every iPhone ends with a 9.
To try this on your site make sure the last numbers on your product are bigger than the first.
- Bundles
It’s late at night. I'm watching T.V. A guy comes onto the screen talking about how great this kitchen knife is. At the end of the commercial, he says...
"Today you get this knife for 39.99, but that's not all if you order right now you get the whole set. That's 10 knives for 39.99. Thats right. Normally we charge over a hundred dollars for this set. But if you order right now you get the master kitchen knife and 10 more knives for free for only 39.99"
"Wow that's a great deal if you buy one knife you get 10 for free?" I thought to myself.
The truth is he was charging 39.99 for all 11 knives and making a profit. But because he split the bundle apart and offered the other parts for "FREE" it felt like a great deal.
A cheesy and extreme example would be... "Buy this charger and headphone set today for $1099 and you get the brand new iPhone for free"
Consumers are more sophisticated nowadays so you would do better to reverse that. In our knife example, we would sell the 10 and give one away for free.
see if you can split up your product or service and offer the other components as free bonuses. It will increase perceived value.
BONUS TIP: Make the physical numbers on your prices smaller it makes the number feel smaller.
As you can see a few simple changes can increase your sales. Make sure you always A/B split test these changes one at a time. See if they improve conversions on your site.
P.S. If you like marketing posts like these, give it a Like.
I always wondered if it was worth doing the .99 ending to SaaS products. Whole numbers look more aesthetically pleasing and if the value is there then surely the .99 won't make too much of a difference right?
Honestly, I don't think its as effective anymore. People are used to seeing that everywhere and are already used to the gimmick.
As long as the last number is bigger than the first, it doesn't have to be .99 For example: If the product is $120, pricing it at 128 is just as good as 120.99. That's what Apple does they sell the iPhone at $1099, not $1099.99. But always split test and see what works.
Simple and to the point, thanks!
Do you know if a sass product who has done any of the 1 of 3 with A/B testing results?
I know mail chimp does all 3 of these. But it doesn't matter if others have had success or not. You have to test on your own customers.
After you pass the licor section you will "feel" the same 3 psychology effects on your pocket when you buy a six pack beer ... :)
Pedro
Nice. Always heard about the 99 thing and it does work. A less obvious method is giving customers a price history view so they can compare for themselves and see if they're getting the best prices
Great Tips to hack conversions! Thanks
Thanks for writing this, learnt a lot
Thanks for this, learnt plenty from it!
this article has been really helpful, we at designpro wanted to change our pricing to engage more audience and stay market competitive. the above mentioned hacks will surely be utilized.
Learned a lot of things...