How to make your Price seem smaller
People have no absolute sense of value. Instead we weigh the differences between different things and ideas. This is the bedrock understanding that the branch of psychology called “psycho physics” is built on.
Price is a made-up number. Whether or not this made-up number is fair is purely judgmental. How you present your price is part of the formula for influencing the buyer to buy. Here are a collection of ideas to consider, all of which are based on some scientific research:
Anchoring – quote a big number in front of your price. “There are 1 billion cinnamon and by the way my fee quite is $12,000” makes the fee seem relatively small. Conversely, “A happy meal is $5 and by the way my fee is $12,000” has a completely different feel.
Contrasting – compare the price to something else. “The opportunity cost for not buying this thing is immense.”
The Power of Nine – Prices that end in nine tend to outsell all other product prices. Second place goes to the number of seven.
Left Digit Management – the most important number in a price is the left most digit.
Phonetic Simplification – avoid the commas and cents. 1399 feels smaller than $1,399.44.
Verisimilitude (the appearance of truth) – Quoting a round number like $600 for a service such as tax preparation is an open invitation to negotiate. A better alternative is to quote $593 or $614 that appears to have some real policy behind it and less open to negotiation.
These are just a few of the ideas that you should consider when you present your price to the customer. I am not suggesting that you can trick people into overpaying for the value of your products. I am suggesting that you can enhance the value to price ratio by making your price seem smaller.
Pricing strategy is always a fun discussion. Please feel free to give me a call at (352) 317-5692 if you have some ideas or questions that you would like to discuss.