What is Psychological Pricing?

Psychological pricing is a pricing/marketing strategy based on the theory that certain prices have a bigger psychological impact on consumers than others.

Psychological Pricing Strategies You Could Adopt

The Power of "9"

This strategy, often called "charm pricing," involves using pricing that ends in "9" and "99." With charm pricing, the end digit is reduced from a round number by one penny. For example, your brain processes £3.00 and £2.99 as different values: to your brain £2.99 is £2.00, which is cheaper than £3.00.

'Prestige' Pricing Strategy

Do you have a premium product to sell? Prestige pricing is the complete opposite of charm pricing. Prestige pricing involves making all numerical values into rounded figures, i.e., £99.99 is converted to £100.

'BOGOF' or Buy One, Get One Free

This is a pricing strategy in which customers pay the full price for one product or service to get another for free.

The psychological strategy at work here is, quite simply, greed. Once a customer comes across the offer, logic flies out the window and the main focus is making a purchase to get the free item.

Comparative Pricing: placing expensive items next to standard ones

Perhaps the most effective psychological pricing strategy. This simply involves offering two similar products simultaneously but making one product's price much more attractive than the other.

This is a psychological game of choice for the customer, who has to choose between two products that are similar but have different prices.

Visually Highlight the Different Prices

When you offer a sale with a previous price side by side with a new one, you make more sales because customers feel they are getting a bargain and are not interested in researching the drop in price.

To make the new pricing strategy work effectively, use the psychological trick of changing the font, size and colour of the new price.

Give it a Go

So, how about giving these psychological pricing strategies a try, remembering to split-test different ones on different pages and products to determine what works best for your business.