Understand Your Buyer > How People Work > Price Trickery

 

What is it?

How you communicate your price can impact the PERCEPTION of your price.

 

How does it work?

It works because it’s been proven that “odd” pricing and “the left digit effect” change how we perceive prices.  For example:

Consumers’ price evaluations are influenced by the left-digit bias, wherein consumers judge the difference between $4.00 and $2.99 to be larger than that between $4.01 and $3.00, even though the numeric differences are identical. Source

 

How can you use it?

Communicating your price can be used either to make your offering feel more expensive or to make it feel less expensive. By playing with the currency symbol and pennies we can change how the price is perceived.

Firstly, you need to be aware of Anchoring – the FIRST price your buyer sees becomes their reference point.

 

Make things appear more expensive

• • Remove the currency symbol  = 7.00 
  • Remove the pennies = £7
  • Remove the pennies and currency symbol = 7

Make things appear less expensive

• • “Odd pricing” – use a .99 or .97 for the pennies.  = £7.97
  • Keep the currency symbol = £7.99

 

Examples

Many upmarket restaurants remove the £ sign which can make you feel like you are in a more upmarket place.

 

 

 

See also

• Results Based Pricing
• Cost Plus Pricing

 

 

Like this kind of stuff? Want more?

Then Practical Sales Training™ is for you…

Action focussed, affordable sales training

for entrepreneurs and small business owners.

Brought to you by James Newell