Price Psychology and Online Marketing

Hi! In this quick video, I want to show
you five simple things in price psychology
that you can use to make your prices seem more attractive. Let’s get into it.
Number 1… Ego pricing. In one crazy study,
researchers were able to match prices to people’s birthdays and found
that it increased purchase likelihood. They offered a pasta dinner for $39 and in the description, they just told
people about what that dinner would entail, but when it came to presenting the
actual price that people would pay to get this pasta
dinner, they got a little tricky. For some people, they changed the price a
little bit so that it matched their birthday. So if the participant was an April 15th
baby, well then, the cost of the pasta dinner
would be $39.15. When it came time for them to say how
likely they would be to purchase this pasta dinner, the people who saw a price with their
birthday in it reported 23% greater likelihood of purchasing that
product. Just ’cause it matched their birthday! Number 2… The comma effect. In another study,
researchers did something really simple. They just presented people with prices
that either had commas in them or not. So for example, the price $1,342 to some people would look like this… and other people would look like this… And the question is: “does that change
anything about how they perceive the price?” Yes, it does. Turns out that when there
was a comma in the price, people perceived it as being 11% bigger, relative to the non-comma price. So keep those commas out of your prices
if you wanna make it look a little bit lower. Number three….the
“relative size effect.” Let’s say you wanted to discount your
product. You would show people what the price used to be… and then show them what the price is now. But how do you present those prices? Well, some research has looked at whether
you should make the sale price really big to draw people’s attention to it or make the sale price really small…
because after all, you want people to think it’s a small number, relative to
the original price. And what they find is that the version
where it’s really small is the optimal version. People report
greater purchase likelihood when they present the sale price in
relatively small font because it signals people to think of it
as a smaller number. Number 4: Consolidated Surcharges Let’s say you have a product, and you
have to charge an additional fee for shipping and handling and a further additional fee for tax.
What do you do? Well, the research shows that rather than
leave those two surcharges separate–like this [see video], you should combine
them together into one lump surcharge, even if it looks as though
that surcharg is bigger. Finally, Number 5 — high five! —
The Descending Order Effect In one study, some researchers
infiltrated a bar…if only all researchers could be so lucky. What they did is for an eight-week period
in the bar, they just got them to use different
beer menus every other week. On some weeks, they would list the beers
on the menu in ascending order, from the least expensive beer down to the most
expensive, and on other weeks, they would list
the beers in the opposite order, starting with the most expensive, and going down to
the least expensive. And what they found is on the weeks
where the beers were listed in descending order, starting at the most expensive, people
chose more expensive beers, on average, compared
to the weeks where the same beers were listed in the opposite order. On average, people had spent almost 24
cents more per beer in the “descending order” condition,
compared to the “ascending order” condition, and over those two
months, the bar sold more than 1,000 bottles of beer, so that 24 cents really
does add up. So there you have it–five studies from
price psychology that may change the way you think about prices. If you found these interesting and
compelling, and you gotta know more, click on the link under this video to be
taken to my full online course about price psychology. We’ll cover all
these things in greater detail plus a ton more pricing strategies that you
can use in your own marketing efforts. In fact, if you
use the link that’s below this particular video,
you’ll get a certain percentage off the total cost of the course. And did I choose that percentage based
on price psychology? Yeah, of course I did. I’ll see you next

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11 thoughts on “Price Psychology and Online Marketing

  1. Can we use price psychology backwards? If you have a spending problem maybe you can have a web plugin that looks for prices using the reg exp $[0-9]+.[0-9]+, then adds "," so that $200.52 becomes $2,0,0.520

  2. Great points! It reminds me of the notion that people are slightly more likely to move to a city if the first letter of the city matches the first letter of their name.

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