Using Pricing Psychology To Boost eCommerce Sales and Profits
As an online retailer looking to boost eCommerce sales, you need to think about pricing psychology. Using pricing psychology, you can easily convince (or manipulate) potential buyers. You want their attention on your products or services and want them to spend more than they normally would. Research shows that consumers are not able to accurately estimate “fair” prices. They consistently fall for marketing gimmicks powered by pricing psychology. Businesses in the know already employ popular (and successful) pricing psychology. They influence their consumers’ irrational and unconscious minds and entice them into making purchases.
The Psychology of Price.
When it comes to making a purchase decision, it all boils down to Price! In fact, being the most pervasive covert persuader of all, price plays on the psychology of consumers more than anything else. Sale ads, rebates, discounts, coupons, freebies, and package deals(combos) all fall under the new psychological pricing strategy that marketers focus on. They know that these strategies persuade consumers and successfully boost eCommerce sales.
Here are a few tried and tested ways to use pricing psychology to influence consumers to buy in order to boost eCommerce sales.
Magic Number 9.
Popularly known as a charm number in the marketing world, the number “9” attracts more attention than any other number in pricing psychology or terminology. It inspires purchases! Shoppers love it! A visit to a Walmart or Target store will give you a good idea of what Magic Number 9 can do. There is a reason why product prices end with 9 in big box stores. Surely smart people understand that there is hardly any difference between 29 and 30. But it’s magic number 9 that plays on the psychology of consumers, encouraging them to go ahead with the purchase.
Something Better than Magic Number 9?
When it comes to selling, you need to effectively price items to sell. You need to convert potential buyers to buyers. The power of magic number “9” is very powerful, but there is something even more powerful! Showing the original higher price for comparison next to the lower discount price makes choice easier for buyers. The comparison communicates to them that it’s a great deal and convinces them to make the purchase. Sale price markers that use both old and new prices tend to have a bigger impact on buyer psychology than magic number 9.
According to researchers at the University of Connecticut and Clark University, the impact further increases if the prices are marked using a small font size. When the price was written in small font, instead of larger bold letters, sales increased! They discovered that the human mind easily relates physical magnitude to numerical magnitude.
Good-Bye Dollar Sign!
Surprisingly, buyer psychology is also influenced by the dollar sign ($). Meaning product prices marked with dollar signs are less likely to be sold compared to those without the $ symbol. According to a 2009 Cornell University study, guests in a high-end restaurant spent more on a numeral-only menu compared to the one with prices listed with $ signs. Our mind tends to follow the path of least resistance. So, getting rid of the dollar sign lets the consumer focus on the product alone instead of its price also. Removing the dollar sign from the price of a product will increase your chances to influence prospects to go ahead with the purchase and thus boost eCommerce sales.
Combos Are A Hit.
Bundling products together and offering them at a slightly lower price than what each product would cost individually is a common price tactic adopted by many businesses. By offering combo deals, you encourage customers to spend more than they would without the combo deal. Often consumers fall into the trap of combo deals that entice them to buy things they may not urgently need. They may need one of the products, but it’s too good a deal to pass up and they end up buying the combo. As a result, retailers make more sales and more profits.
Undoubtedly pricing is one of the key factors a consumer takes into consideration before buying a product. If you can employ some pricing psychology to your products, you can influence purchase decision of prospects and boost eCommerce sales. Read more about pricing psychology in William Poundstone’s book titled “Priceless: The Myth of Fair Value (and How to Take Advantage of It)”. It is available (link) on Amazon.com.
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