In the world of eCommerce, the price of a product can be a determining factor in a customer's purchasing decision. While pricing can be largely subjective, psychological pricing is a key concept that retailers can use to improve conversion in their online store.
Psychological pricing is pricing that is set based on the customer's perception of value, rather than the true cost or market price. These prices are based on human psychology, trying to influence the customer's perception of the value of a product. Here are some psychological pricing strategies that you can incorporate into your eCommerce to increase your sales.
The "anchored" pricing strategy is a psychological pricing technique that focuses on setting a seemingly high price for a product before displaying its actual price. By initially presenting a higher price, customers see the actual price as a low price, which creates a sense of savings or profit.
This technique is based on the psychological principle of "cognitive dissonance," which refers to the incongruence between beliefs, attitudes and behavior. When a person sees the higher price, his or her brain begins to construct justifications for that amount, but then feels surprised with the lower price, generating the perception of an offer or promotion.
For example, one way to apply this technique would be to publish an ad that shows two products: a shirt that costs 100 euros and another shirt that costs 150. This ad makes customers believe that 100 is a reasonable price for a shirt, and then when they see the real price, they are attracted by the apparent offer to buy it for less. This can generate a positive effect in the consumer's mind and increase the likelihood that they will make a purchase.
In short, the anchored pricing strategy involves presenting a higher price before showing the true price of a product, so that the real price appears lower and more attractive to customers' eyes. This technique requires an understanding of how consumer psychology works and can be very effective in increasing sales in your online store.
One technique that has been shown to work well in relation to psychological pricing is odd numbers. Prices that end with odd numbers, such as 29, 39, 49, etc., are often seen as a more attractive offer by consumers compared to round numbers.
The reason behind this is that odd numbers make a price seem more "specific" or "precise," leading to a higher perception of value in the consumer's mind. For example, a price of €39 might be perceived as fairer relative to a price of €40.
In addition, prices that include a small number can also encourage a sense of impulse buying. When the price seems affordable and fair, the customer is more likely to make the purchase immediately.
An example of how you can apply this technique in your eCommerce is to set the final prices of your products in odd numbers such as 59, 69, 89, instead of rounding them to 60, 70, 90. This can increase the perceived value of your product in the eyes of the consumer and, as a result, increase the likelihood that they will make a purchase.
In short, the odd number strategy is an effective psychological pricing technique that can increase the perceived value of your products. By using odd numbers, you are creating a sense of fair pricing and accuracy that can encourage impulse purchases from your customers.
The bundle strategy is a popular form of psychological pricing that offers customers the chance to purchase multiple products for a single price. This technique incentivizes shoppers to purchase multiple items together rather than buying them individually to get better rates in the end.
In this way, the consumer sees that the total value of the product is greater when they are purchased as bundles. For example, instead of buying two T-shirts separately for €15 each, the customer may choose to buy the bundle of two T-shirts offered for €25. In this case, the bundle strategy incentivizes customers to save money while giving them more value for their purchase.
In addition, this technique creates a win-win feeling among users: The user has access to a good price and the company sells more products at the same time. This helps to reinforce brand loyalty and allows you to sell complementary products together to achieve higher levels of customer satisfaction.
Thus, the bundle strategy helps drive sales by offering proportionately greater discounts for those who choose to purchase your products as bundles or combos. By fostering positive feelings between buyers and companies, this technique encourages overall satisfaction and loyalty to your brand.
The seasonal discounting strategy is another psychological pricing technique that can be applied in your eCommerce to drive sales. This technique aims to take advantage of the customer's sense of urgency and limited nature to encourage immediate action and ultimately increase sales.
This strategy involves offering discounts during certain defined dates or periods, for example, major holidays such as Christmas, Father's Day and Thanksgiving. By offering discounts once a year, customers may see this one-time offer as a great opportunity to get products at very competitive prices before they run out. This creates a sense of urgency among shoppers to make sure they don't miss their chance.
Therefore, by including seasonal discounts in your annual promotional calendar, you can build anticipation among your customers about upcoming special promotions and better encourage them to feel that their purchases are timely and valuable.
In short, seasonal discounts are an effective driver of better conversions in your online store. By offering discounts during key calendar days, you are creating a sense of urgency among your customers to buy before the deals run out.
Scarcity is a psychological pricing technique that exploits the principle of supply and demand to stimulate purchase intent among customers. This means that when fewer units are available, they become more valuable, and customers will have a greater interest in buying them.
In this way, by keeping your inventory at a strict and limited level, you are generating a sense of urgency among your buyers to act quickly before the products disappear. This helps build anticipation among your users by showing them that they have a unique and unrepeatable opportunity to get certain products before they run out, as well as fostering positive feelings towards your brand.
In addition, to be even more convincing, you can present the finite resources in such a visual way that the user directly perceives the limited level. For example, you could use alerts or counters on the main screen with information about how many units are available for each product or service offered on your website.
This is a key marketing practice that drives sales by stimulating interest and immediate action among your shoppers. By controlling your inventory and presenting it visually as a limited resource, you can encourage consumer sentiment to buy now before all the products offered are gone.
Psychological pricing is a very useful marketing tool that retailers can use to improve their online store conversion.
By understanding consumer psychology and knowing how to use psychological pricing in their eCommerce, business owners can increase the perception of value for customers and optimize the profitability of their online store. As your brand grows, it is important to keep experimenting with different pricing strategies to find the right mix for your eCommerce.