The Right Price Can Make a Big Difference
Using smart pricing strategies can make a big difference to your sales and help you succeed in a competitive marketplace. Each product and service is unique and therefore what works for some companies may not work for others. Nonetheless, the strategies outlined below may be a good solution for your business.
1. Give Your Customer Choices
By giving your customers choices, they feel in control of the purchasing process and are more likely to feel committed with their purchase.
2. Limit Your Choices
However, when you provide your customers with too many options, they can experience action paralysis, feeling demotivated to purchase or incapable of making a decision. Provide enough options to allow your customer to make a decision about their purchase but not so many that you confuse them.
3. Utilize a Price Anchor
Price anchoring utilizes a human psychological tendency where people rely on the first piece of information offered when making decisions. With that said, the best way to sell a $500 necklace is to sell it next to a $1,500 necklace. By placing a premium product or service next to your standard version, you can create a value or bargain comparison that will drive your customer to make the purchase.
4. Reduce the Pain Points
By making the sales process as simple, efficient, and quick as possible, you will find that your customers are more prone to purchase. The less that is required of the customer to buy your product or service the better.
5. The Old #9 Classic
One of the oldest tricks in the book is ending the price of your product or service with a 9. Rather than selling your necklace for $500, try $499. While there is much anecdotal debate about the effectiveness of this strategy, several researchers conclude that this strategy is in fact effective.
6. Test Your Pricing at Different Levels
See how your total sales and profits change when you test your product and pricing mix. When selling a premium and a standard product, try adding a third version. See if sales go up if that third version is a notch below the standard. And likewise, if that third product is a notch above the premium.