Welcome to a huge list pricing strategies based on psychology. Valid both for companies and for anyone who wants to sell something on eBay, launching a new product or negotiate the sale of a property. Here we will learn how money gets to things to maximize profit.

Step 1: Determine the price

Large companies have an advantage. They can afford the best of the best marketing research (joint analysis, for example) to find the best price for their products. Small businesses do not have that luxury. That is where psychology comes in.

According to research on behavior and knowledge, certain prices are more effective than others. Even if they find the exact optimum point, any business can make small adjustments powerful-though to maximize the effectiveness of its price. And free. In this section we will learn how to process the public numerical values (and accordingly adjusting the figures on prices).

Strategy: Use an attractive price

During the last two decades, the marketing world has fallen to attractive prices: those ending in 9, 99 or 95 The results speak for themselves.. These are the results of the online store Gumroad:

When people see positive results, often thought to be due to the nines price. However, there is another culprit: the leftmost digit.


Tactic 1: Reduce the leftmost digit one

An attractive price is effective when the left digit changes. One cent difference between 3.80 and 3.79 is not important. However, a penny difference between 3.00 and 2.99 changes everything. Why it is so important digit of the left? It has to do with the way our brain encodes numerical values .

It is something that our brain makes it so quickly (beyond consciousness), which we encode the size of a number before you finish reading it . Thomas and Morwitz (2005) explains:

“… When you assess” 2.99 “, the encoding process begins magnitudes as our eyes are the number 2. Accordingly, the perceived magnitude of 2.99 is anchored to most digit to the left (is say, 2) and becomes significantly less than the magnitude 3.00 “(page 55).

Extra tip : That base number can visually emphasized decreasing the size of the digits after the decimal.


Strategy: Use the right amount of fluidity

To determine the amounts of your money, you should also consider what is the process fluid, the ease with which information is processed. We can infer certain characteristics on a price, based on the ease of the process .Here we look at how to choose numbers with the right amount of fluidity.


Tactic 2: Use a suitable rounding

One aspect to consider is the rounding in the price. The round prices (100, eg..) are processed with ease , while the rest (eg 98.76) are not processed as well. You can affect sales this election?That the researchers believe. Wadhwa and Zhang (2015) found that the round prices, which are processed – work best in emotional purchases. When customers can quickly process the price, the price “seems fair.”

The researchers also found that the opposite is also true. Customers need to invest more resources to process mentally prices without rounding . So those prices seem better suited for rational purchases.

Despite this direct evidence, a warning: even if the purchase is emotional context, we must avoid rounded intervals (such as 100, 1000, 5000). The public assumes that these prices are swollen by artificial way, because other positions (Janiszewski and Uy, 2008). So where aid rounding? Rather it used to know when to add cents to your price.


If the purchase is emotional, then removes cents.

If the purchase is rational, adds cents.


Tactic 3: Choose numbers with few syllables

Our brain uses more resources to process more extensive phonetically prices (which also affects the flow). Since we use more mental resources, falsely we infer that such prices are also more expensive . The counter is more important. The public perceives that the price is lower if it contains few syllables.

Like me. But studies tell us that it does not matter. When you read a price in writing, your brain accompanying non-conscious way with the audio version of that price (Dehaene, 1992). You do not even need to verbalize the price in your mind: your brain does for you what you want or not.

Do not believe me? Coulter, Choi, and Monroe (2012) found a positive relationship between perceived syllabic length and magnitude. Even if the two prices are the same length in writing (90 versus 87), people perceive the price phonetically longer as a higher price.

Step 2: Influence perception

“All our knowledge has its origin in our perceptions.” – Leonardo da Vinci

Nothing has a specific meaning in our world. All we know is the result of our perception. After all, the price is merely a perception . No more no less.

This is good news for traders. There are no universal standards that dictate whether a price is high or low: it all depends on how it is perceived. And there are tactics to alter the perception of the people and that prices seem even lower (without changing the price itself).

Strategy: Compare prices

It can affect the memory that people have a price. When the public compares the price with another reference, it can influence them to mess a lower price in comparison. Why do that to the public? Because this strategy takes advantage of the laziness of our brain to encode numeric values. Adaval and Monroe (2002) explain it best:

“… Information the price of a product rarely is encoded in our memory in numerical exact terms.Rather, it is encoded more generally spontaneously magnitudes (“cheap”, “expensive”). So the numerical price is susceptible to the influence of their original context when people try to rebuild it later “(page 585)

As our memory is vague, we may be influenced when remembering a price. How? Just rephrase it to express a lower numerical value . Expose people to the lower value will make codify directly to a lesser extent.

Tactic 4: Do not show handling and preparation

Online retailers usually separate the shipping and others. When a “partitioning price” is used, it is possible that people will stick with the base price, instead of the real total price (Morwitz, Greenleaf and Johnson, 1998). When people compare that price with a reference price, they tend to keep the base price without expenses – in comparison.

Hossain and Morgan (2006) tested this tactic with eBay auctions. They focused on auctions for music discs, and analyzed the different structures of the bids. Some auction opened with a minimum bid with shipping (eg $ 0.01 to $ 3.99 in postage). Others offered a higher starting price without shipping costs (eg free shipping four dollars).

In the end, the auction bids with low output (and handling extra) had more bids and generated more revenue. Oh, and Clark and Ward (2002) found similar results for the auction of the letter Pokémon “Charizard”.

Tactic 5: Provide installment

Similarly, when you give people the option of paying in installments product into smaller (instead of a large sum at once), the public is left with the smallest amount . Imagine that you are offering an online course for 499 euros. By offering installment payments (say five installments of 99 euros each), you are polluting the process of comparing the public.

It is more likely to compare the price of the deadlines (99) with the total price of competition (500). A huge difference that our proposal would be much more attractive. But do not get the wrong idea.People are not stupid . They know that 99 euros compared with 500 euros is not accurate.

But it does not matter. Since normally we compare prices subconsciously (Muzumdar & Sinha, 2005), the amount of the installments (or entry) has enough opportunities to sneak into the comparison.

Tactic 6: He mentions how equivalent per day

Similarly, you can achieve the same effect reformulating a price in the daily equivalent (“0.87 cents a day”, for example). It is a strategy that influences the public when we perceive a lower price. Still, the regular price is usually always the primary goal. What you do is mention that daily equivalence. That lower number makes people perceive the price in the lower price range.

If it is not easy to reformulate the price on a specific daily charge, it is also used another trick: compare the price with little expense , such as “x Mugs” (Gourville, 1999).

Strategy: Primar small magnitudes

The previous strategy explaining how certain numerical anchors percecpción can influence the price.However, anchoring effects are beyond the numerical values . It can also influence the perception through general magnitudes.

For example, Oppenheimer, LeBoeuf, and Brewer (2007) found that the public does lower numerical estimates if they are asked to draw a short line (as opposed to a long). If it is intended that a lower price is perceived, it is necessary to associate all its characteristics related to a smaller extent.And there are tactics related to that.

Tactic 7: Position the price in the left part of the background

Drop the price on the left side it makes people perceive a lower price (Coulter, 2002) . It sounds strange, but pay attention for a moment: studies show that positioning is associated with certain concepts . For example, your spatial conception of “up” is metaphorically associated with positive qualities:

“… The honest go ‘up’ to heaven, while sinners go ‘down’, to Hell. In the media, critics give ‘thumbs up’ to good films and ‘thumbs down’ to the poor. … People who use drugs is ‘high’, but when the euphoria decreases reaches ‘the hump’ ” (Meier and Robinson, 2004, page 243)

Since we associate “up” to “good”, give prominence to the spatial concept of “up” can unleash “good” associations. Meier and Robinson (2004) found that people recognize positive words faster when those words are positioned in the part above a screen (and, conversely, that negative better recognized when they are positioned at the bottom).

The same principle applies to the numbers. Dehaene, Bossini and Giraux (1991) found that people conceptualize numbers in a horizontal line, on an increasing scale from left to right. In their study, they showed participants the digits 0 to 9 and asked the subjects to indicate their parity (if they were even or odd).

A s expected, participants responded more quickly to small numbers when they used his left hand, and vice versa. In other words, people respond more quickly when using the hand that corresponded to the same side of your mental rule.

But what you have that to do with the money? Since we conceptualize the smaller numbers as belonging to the left, place the left prices can make people conceptualize smaller quantities, thus altering the perception of price (Coulter, 2002). Since we can also associate the numbers with a vertical extent (small numbers correspond to the bottom), it is best to place them at the bottom left.

Tactic 8: Use a font size smaller

Apart from the directional feet, the physical size of the price also affects your perception of it. Thanks to the fluidity of the process, the public perceives that prices are cheaper if they are displayed in a smaller font. This tactic is especially effective when the price is contrasted with a reference price shown larger (Coulter and Coulter, 2005). Not to forget the kerning , character spacing. Sources with less spacing will also influence the price to be perceived as lower.

Tactic 9: Delete the point whenever possible

The puntuacións also influence such as kerning and size. Studies show that removing the points (versus € 1,499 € 1,499) also affect the perception that something is cheap (Coulter, Choi, and Monroe, 2012). Why does this happen? Although the physical length has a role, there is another principle to consider. One we have already seen. Do you remember which one? When you remove the punctuation, you reduce the phonetic length price.

It is a consistent fit with the fluidity that makes you perceive a cheaper price.

Tactic 10: Use a “consistent” language

Certain words can affect percecpción people, so great care is taken when language accompanying the price is chosen. Coulter and Coulter (2005), for example, showed the subjects of his study several descriptions for skates online . Some of the descriptions emphasized the “low friction” as a benefit.And the rest highlighted “high performance” as a benefit.

Even though participants noted benefits both equally important, subjects were more receptive to the price when the description contained “low friction”. That is, to choose the language that accompanies the price, words that are “consistent” with a small value (“low”, “small”, “minimum”) are selected.

Tactic 11: Precision at high prices

Thomas, Simon, and Kadiyali (2007) analyzed 27,000 real estate transactions. And what did they find?That buyers pay more money when prices are specific (362,978 versus 350,000, for example).Does it have to do with negotiation? If someone asks you a specific price, would not you give for thinking that you have less room to negotiate?

That’s what I thought. But no. The researchers ruled out that possibility. Surprisingly, the real culprit was related to highlight a smaller magnitude. Think a moment. When you tend to use more accurate values? Answer: when you handle small numbers (1, 2, 3, etc.). As associate precise numbers with small values, the precise numbers unleash the partnership, thus influencing public perception.

Bonus : Since a house is a rational purchase, usually increases the psychological impact using a precise number and not rounded (€ 362,798.76, for example)

Strategy: Maximize the reference price

The above two strategies helped reduce the perceived magnitude. However, it can be achieved the same effect by maximizing the perceived magnitude of reference prices. And yes, there are some tactics to achieve this effect.

Tactic 12: begin negotiations with a large number and precise

With what we have seen on perceptions anchor no surprise that marketers take out more money starting negotiations with an initial highest offer (Galinsky and Mussweiler, 2001). That high number provides an anchor point, which makes the rest of gravitate deal on a smaller range.

Not only high initial price tactics used, but is also assigned a precise value. It is a study, Janiszewski and Uy (2008) asked participants to deem the actual price of a plasma TV based on the suggested retail price. That was 4,998, 5,000 or $ 5,012.

When given to participants precise values (4,998 and $ 5,012), they estimated that the real price of the TV should be closer to that range. When given a rounded price ($ 5,000), the subject concluded that the actual price should be much lower.

When an anchor is accurate, we adjusted our estimates in a smaller range. Why The culprit is your mental rule, as explained Thomas and Morwitz (2002) :

“If we saw the setting as a movement along a scale of subjective representation, then the resolution of this scale could also influence the amount of the adjustment. X adjustment units along a scale cover further definition of objective distance less than the same number of adjustment units along a scale ” finger ‘. (Page 121)

This knowledge works especially well in eBay auctions . When you create an auction, you can generate more revenue by setting a higher reserve price: the price to reach for the “Buy It Now”. High reserve prices anchored to the participants in the auction to the highest part of the price range, and the result is more revenue (Kamins, Folkes and Dreze, 2004).

Tactic 13: expose the public to a higher “fortuitous” price

Given our tendency to assimilate a price anchor, would it work exposure to higher prices of products that do not even have anything to truth to prepare to pay more? ¿Thus we would pay a higher price for a product?

Nunes and Boatwright (2004) tested this possibility. In a very popular boulevard of West Palm Beach, researchers music discs sold. Every 30 minutes, the seller adjacent alternated the price of an exposed sweatshirt: 10 to $ 80 .

What happened? What you’re thinking: the price of the sweatshirt served as an anchor on both sides of the price spectrum. When the price of the sweatshirt was $ 80, buyers paid more for the CD . If you sell on eBay, you may want to mention the other products that you are selling (the most expensive, of course).

Tactic 14: Exposing people to any number raised

The anchor works not only with prices but with any number, whether that number is a price. A notable example: Ariely, Loewenstein and Prelec (2003) showed participants in his study several products (from wireless keyboards, to rare wines, to Belgian chocolate). They asked the subjects whether they would buy each product price in dollars that corresponded with the last two digits of your social security number .

After receiving the answers YES / NO, the researchers re-ask the participants: to point out the exact dollar amount they would pay in this case. Remarkably, the researchers found a direct correlation between the number of social security and the price that the participants were willing to pay.Here are the data for one of the products, the wireless keyboard:


How can you apply this finding? Should marketers without asking customers to think about a lot?No. Your job is easier. The anchor effect occurs in the unconscious, so consumers do not need to contemplate a numerical anchor. In fact, Adaval and Monroe (2002) subliminally exposed people to a higher number before showing a price. That exposure led people to perceive the price as shown cheaper.

Does the icing on the cake? Even if potential customers do not consciously realize the numerical anchor seller, you do not need anything more you expose it to work. In online stores, would need only mention the total number of customers near the price . When people generate their reference price, the high number trigger the anchor effect (and its reference price will be higher).


Tactic 15: Raising the price of a previous product

If someone launches a new version (and more expensive) of a product, what price should put the product “old”? Some businesses will lower the price of your old product to make it gradually disappear from the market.

Surprisingly, it is the wrong strategy .

Baker, Marn and Zawada (2010) suggest that raising the price of the above product also raises the price of customer reference (thus improving the perceived value of new product). Bringing the new product goes on more favorable terms.

Consequently, if the price of the above product is low, it is inviting failure. What it does is reinforce a lower reference price, which makes the new product look more expensive .


Strategy: Emphasize the interval between the reference prices

Previous strategies or minimized the perception of price or maximized size reference prices. This strategy does is maximize the perceived distance and mong the seller’s price and reference prices higher .

Tactic 16: Visually Differentiate comparisons with high prices

When one compares the price higher, the public is more inclined to buy the product because they feel less motivated to check its decision (Urbany, Bearden, and Weilbaker, 1988) : they believe they have already done their homework. But there is a psychological trick to further increase this comparison.

If the price is visually distinguished from the reference price (using a color different font, for example ), an effect of fluidity is unleashed. Consumers visual incorrectly attributed this difference to an even greater numerical difference (Coulter and Coulter, 2005). Pour this effect not only works with the color of the font, but also with the physical distance.

When the price is horizontally own furthest from the reference price, people perceive a greater numerical distance (Coulter and Norberg, 2009). Not to mention the font size. Smaller font sizes are especially effective when placed next to a higher reference price (Coulter and Coulter, 2005).


Tactic 17: Provide a decoy product

Often, people use the products in the same store to set the reference price. To ensure that the comparison is conducive to its objectives, many businesses use a “bait product.” you may hear a well-known study, Predictably Irrational, Dan Ariely (2008), which describes a strange offer Economist magazine. One day, Ariely noticed three subscription options:


  • Web only: $ 59
  • Print Only $ 125
  • Print and Web: $ 125


At first glance, it seems that the “print only” choice was a mistake. Who would choose that option when you choose print and web for the same price? But Ariely realized an underlying reason. He conducted a study to test his hunch. The “print only” option marked a huge difference. Without that strange choice, people might not accurately compare the options. How much should I pay for a subscription to the print edition and the web? Who knows. Most people chose the web option because it was the cheapest.


However, the “print only” option helped the public to compare the other options. As it was a similar, though worse, to “print and web” option, the customer could easily recognize the value of this last subscription. As more people chose to end the “print and web” option, the Economist earned 43% more revenue.


When you offer different versions of your product, the audience naturally compare those options. To guide people toward more expensive version, you can take the same approach. Add a similar but worse expensive version of a comparative product influences. Suddenly this expensive product becomes more attractive.


Step 3: To motivate us to buy

Even if the perceived magnitude of the price is reduced, customers can stagnate. You give them a push. This section shows some price tactics that motivate us to buy. In short, how to reduce the “pain” that we associate with pay and how well used the savings to boost purchases.

Strategy: Reduce the “pain of paying”

Every time we buy something, feel something called “pain of paying” (Prelec and Loewenstein, 1998). More specifically, the pain arises from two factors:

  • The prominence of payment (feel more pain if we see money leaving our hands, for example)
  • The time of payment (if paid feel more pain after eating, for example)


Considering these two factors, it is easy to see why Uber-a shared one transport service has to taxi drivers on the warpath. In traditional taxi rides, the prominence of pay is very high. You see a meter that does not stop rising. Every minute evokes a painful feeling in constant increase. And at the end of the ride, the driver, makes you pay by cash or card. It’s much. Pain. Uber is different. No meter. No physical payment. Everything is automatically loaded to your card. Much less pain. The payment card is a tactic to reduce pain, but can be reduced in other ways. Here we look at a few ideas.

Tactic 18: Remove the symbol of money

The pain can be triggered fáclmente pay. In fact, the symbol of the dollar or the euro in price can remind people that pain and make them pay less (Yang, Kimes and Sessarego, 2009). But beware, before you remove the money business symbol, must consider the overall lightness of the price. Often, it requires a currency symbol to indicate that the number is in fact a price. In such cases, they may risk losing clarity if they remove the symbol. This tactic only works when the client expects to see price (in the account of restaurants, for example).


Tactic 19: Pay before consuming

Businesses try to make the customer to pay before using the product or service whenever possible. Prepaid benefit all parties. For starters, companies do not deliver the product or service without compensation. It is more likely to collect. Something quite useful. And, secondly, customers are happier with the product. When the public pays in advance, they tend to focus on the benefits they will receive, which mitigates the pain of paying. If you have already experienced the benefits of the product, payment becomes significantly more painful (Prelec and Loewenstein, 1998). This knowledge helps a lot with monthly subscriptions. To charge customers monthly payments, you should load the beginning of the month (and display a message that looks to the future). Hence the problem of receipts sent to the end of the month (or payment summarizing the previous month) only serve to rub salt in the wound.


Tactic 20: Pack several products

The bundle reduce the pain of payment: by offering a package of several products, the customer is unable to confer specific value to each package object.

In deciding on a package of products, businesses must follow two important rules. Whatever the added product, must be (1) enjoyable and (2) maintain a similar price to rest. Consider the scenario: First, the product must be hedonistic (emotional), rather than utilitarian (rational). Since the hedonistic shopping unleash more guilt (Khan and Dhar, 2006), a package of several reduces the guilt, especially when the discount is attributed to enjoyable product. Or, as explained Khan and Dhar (2010) :

“… The discount associated with the hedonic object justification required to reduce the guilt associated with the purchase of such items is given. However, since such fault is not associated with the purchase of commercial products, the discount related to the utility component of the package has little further impact “(page 18).

If only they could add a utilitarian product, then it is best to describe a hedonic use for that product. Khan and Dhar (2010) tested a package that included a lamp $ 50 and $ 50 a blender. The public was more willing to take the package if the description emphasizing the hedonistic use of a blender (to make exotic cocktails, for example) compared to a useful purpose (making healthy smoothies, for example).


Second, they tend to avoid expensive products together with cheaper products. Cheap products reduce the perceived value of the expensive products. Brough and Chernev (2012) asked participants in their study they chose between sports equipment for home and one-year subscription to a gym.More omenos 51% of the subjects chose the home team a fairly equal decision. However, when the researchers added to offer free fitness DVD, only 35% of people chose the home option. The DVD reduced the perceived value of home equipment.


Tactic 21: Change the message to temporal aspects

When the product is described, it tends to avoid making references to money. Instead, they usually mention a concept that gives a much greater benefit: time. Mogilner and Aaker (2009) conducted an experiment with a lemonade stand. They alternated between three posters to advertise the post, each with a particular emphasis on different quality:


  • Time: “Spend some time and enjoy lemonade C & D”
  • Money: “Spend some money and enjoy lemonade C & D”
  • Neutral: “Make Lemonade C & D”

When participants arrived at the place, they were told they chose how much they wanted to pay: any number between one and three dollars. The results speak for themselves: the sign of the time it worked much better than the other two. His clients paid double (and the poster also attracted twice as many people). The researchers attributed these results to a personal connection with the product: “As time increases the focus on the product experience, enable that quality (instead of money) increases personal client connection with the product, thereby increasing the attitudes and decisions ” (Mogilner and Aaker, 2009, p. 1). When slogans are written, it tends to emphasize the pleasant time people spend with the product or service. It’s not only a message that makes the offer more attractive, but also distracts people from the pain of paying.


Tactic 22: Create a form of payment

What they have in common gift cards and casino chips? Both reduce the pain of payment. By creating a separate medium between client money and payment, the perception of it is distorted. They know that they are paying, but will not notice. Why you not are noticed as a payment? Because researchers have found that the presence of an additional means, people become too lazy. Enough to calculate the conversion between the two media (Nunes and Park, 2003). And here’s an interesting example, when customers open an account in a business, you may be required to despos 10 euros refundable on your account (for use in services offered). Since money is refundable, customers would not provide much additional resistance. And, more importantly, the payment would distort the essence of that money. Once it becomes a separate medium, it is not perceived as money (and the public will be more willing to spend).


That perception may be strengthened by referring to the money as “the balance of [company name]” or any other name that avoids connotations real money.


If this strategy is implemented, it also seeks to match customer deposits with some sort of percentage. For example, when 10 euros deposited, the company could provide an additional 10% (increasing the account value at 11 euros). This contribution to deposits unleashes two benefits. First, it encourages customers to deposit more money. With the psychological impact of means of payment, is to increase the attractiveness of deposits as possible. Second, an unbalanced conversion between money and its value in the account is created. Drèze and Nunes (2004) explain that intermediate forms of payment become more effective if customers have problems converting values:

“With increased exposure [to payment] and experience, conversion between two or more own currencies can, in theory, become second nature. If that were the case, pordríamos experar that the combination of means of payment and prices in these intermediate forms lose their effectiveness “(page 72)

Strategy: Using strategically discounts

If not used with care, discounts can affect a business, in fact, some people suggest that you should never use deals . It is a warning too extreme. Sure you can use discounts. But businesses have to do it with his head. What can go wrong? If used too often or with great intensity, discounts can make the public become more aware of prices and the future. They keep waiting until the next offer. Discounts may also lower the internal reference price for a product, making the customer buy less in the future (because the price seems too high). Reduce the frequency and intensity of the deals can help. In this section we review additional tactics that are used to maintain the strength of discounts and offers.

Tactic 23: Follow the “Rule of 100”

Previously, we have seen that people perceive different magnitudes for the same price, depending on the context. Discounts do not circumvent that rule. When offered a discount, it is to maximize the amount received it. Thus, the public thinks that is taking a good deal. Consider the $ 50 blender. What discount seems better: 20% or $ 10 rebate? If we do the accounts, both discounts have the same monetary value. However, one of the two has an advantage over the other. Choose what?


  • If the price is below 100, it is best to use a percentage (25% off, for example)
  • If the price is more than 100, it is best to use an absolute value ($ 25 discount, for example)

In both cases, we are choosing the discount with the highest number (which will influence the perception of magnitude).


Tactic 24: Reasoning discount

To avoid negative perceptions, companies often avoid the term “discount”. At least a specific reason for it. For example, stores that have low prices every day often refer to settlements or advantageous arrangements with distributors:

“When advertised sale prices, low-price chains daily (Wal-Mart) often convey the message that they are able to convey the savings obtained by the distributors … presumably to minimize the negative effects of promotions … ” (Mazumdar, and Raj Sinha, 2005, page 88)

To give a reason for the discounts, the idea that the new price is unusual is reinforced. As the price is abnormal, people less likely to assimilate it into their internal reference prices.


Tactic 25: Avoid discounts with precise numbers

Explained before the accurate pricing work best for large amounts. Since people associate precise numbers with small values can influence the public to perceive high prices as having a smaller magnitude (Thomas, Simon, and Kadiyali, 2007). With discounts opposite happens, the aim is to maximize the perceived magnitude. Choose discounts damages the offer precise numbers. Those numbers make accurate discount perceive as minor. Thomas and Morwitz (2006) support this notion with a study that found that the public perceived the difference between 4.97 and 3.96 and smaller than the one between 5.00 and 4.00, although the difference is more or less the same (1.01 and 1.00). To maximize the perceived size of the discount rounded values are used. Customers can better estimate the overall magnitude.


Step 4: Maximize revenue

The company work does not end when the customer buys. Whether intended multiple purchases or a continuation of a subscription service, good businesses generate multiple revenue stream from existing customers. This section shows some of the pricing strategies that play a role in long-term income. We see (1) how do we detect that no price increases and (2) pricing strategies damaged reputation.


Strategy: What price increases are undetectable

In a world of inflation it is inevitable. Prices will increase at some point. Since most people are familiar with inflation, will be more flexible, right? Sure you understand. No, it’s not that simple. Despite inflation and other valid reasons, most consumers do not see any price increase justified. Bolton and others (2003) analyzed that perception. They found that consumers “underestimate the effects of inflation, price changes profit, and fail to take into account all the factors of costs from the seller.”Well, too bad. While a company can not eliminate all the negative effects of price increases, they can get these increases become undetectable (without falling into direct manipulation).


Tactic 26: Using more frequent price increases (but smaller)

The easiest way to manage price perception is through the only perceivable difference. Just Perceivable difference – the minimum amount of change that triggers detection.

If the price is 11.79 €, up to 14.99 € will be more noticeable than a much less than € 12.99. Aha. In theory, the concept is fairly intuitive. Of course people will percenter largest increases. In practice, however, the principle is counterintuitive. Since businesses are afraid to raise prices, they often leave the tactic of last resort. They wait until it is absolutely necessary. However, if you get to that point, then they are desperate for income. They are not able to increase the price in a minimum amount. They need to do so to a limited extent. What do you usually do? If you know you need to raise your price someday, what you should do is use (but smaller) more frequent changes. Avoid waiting until this desperate time. With more frequent price increases, also it prevents reinforce a concrete reference price. If the price performance same for years, then the public will get used to that particular price level.Once it is changed, it is easier to realize any increase.


Tactic 27: Decrease in addition to price a property

That barely perceivable difference can be used in other aspects of the product. Food vendors know that consumers are very familiar with prices, so often avoid price increases, instead reducing the physical size of their products (bags of chips, for example). By reducing the physical size a little bit, the food vendors reduce their costs and increase their margin. And, most importantly, improve your income without having to touch the money (or anything else to alert the public of negative changes). In deciding to reduce the product it is usually also choose to reduce the three dimensions of same-height, and weight-length in the same proportion. Thus, consumers will be more difficult to notice a change in the three dimensions at once (Chandon and Ordabayeva, 2009).


Decrease a product can be risky.If the consumer detects malice in practice, the business may lose confidence and sales.To maximize revenue, necessary to maintain and cultivate customer loyalty. The following strategy describes a number of practices that can harm the reputation of companies.

Strategy: Avoid damaging price strategies. Some pricing strategies leave bad taste. This section states that companies should avoid.


Tactic 28: Do not use false claim rates

When I was looking for an apartment, I saw an incredibly good deal on Craigslist. I visited the complex the next day. Unfortunately, my naivety not last long. The deal was too good to be true. The price listed was a blatant lie: the cheapest apartment building cost $ 250 more per month than advertised.

Using false claim in prices – The seller advertises a lower price extremedamente público.Cuando to attract the audience gets, the product is not available (sold out or does not exist). The seller then try to sell the customer a more expensive product.

It’s something that, apart from unethical, it is illegal in many cases. But even if it were legal, that deception triggers a negative response, which often leads to a drop in sales (Ellison & Ellison, 2009) .


Tactic 29: Beware of dynamic pricing

Over the past decade, more businesses have been adjusting their prices dynamically to different customers. Based on various factors, their algorithms spit a price that should bring the maximum amount of revenue. This trend is known as dynamic pricing. But, oddly attractive, we should not use it.Although drives sales in the short term, Dai (2010) found that lowered the long-term sales:

“Although dynamic pricing are attractive because they have the potential to maximize the benefit of a vendor, the results of this study indicate that charge different prices for the same product can trigger negative judgments about the legitimacy of prices, which leads to intentions negative behavior “(pg. 86)

They are always bad dynamic pricing? Not necessarily. They can be effective when adjustments are based on supply and demand (in stadiums trying to sell the remaining seats, for example). Dynamic pricing becomes a negative when the adjustment is based on what you’re willing to pay a client.Change based on previous behavior, demographics or other external to the supply and demand factor is almost always negative prices.


The latest tactic pricing

Rather than reiterate all pricing strategies, I want to finish with a final tactic: the most important of this list. If someone you follow all these steps still have problems justifying its price before customers (even if you implement all the strategies in this article), not that I have a problem with the price. You may have a problem communicating product value.

Instead of focusing on price, what is intended it is to adjust the value proposition for the best transmit the value of the product or service :


  • What makes the product special?
  • Why it is better than other products?
  • Why customers should enjoy it?


It is possible to solve the price problem quite often to communicate the value more effectively. With this tactic, and all psychological in pricing strategies we have seen in this article, it is much easier to justify a price.




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