Buyers hate price increases more than they love discounts (Prospect Theory). Therefore don’t raise your prices(!) A marketer with a high enough “basic” price can merely reduce the amount of the offered discount. This can be a 2-step process. 1. Raise your basic price, but increase your discount so your customers pay the same asContinue reading “Buyers Hate Price Increases”
Author Archives: Marlene Jensen
The Price Number on the Left
The price number on the left can make big sales differences from tiny price differences. Examples: $49 vs. $50 or $89 vs. $90. Test result: A service business found no price resistance moving from $40/hour to $45…. but a huge difference between $39 and $40. Source: The Tao of Pricing. See also: Pricing Psychology Report.Continue reading “The Price Number on the Left”
Beware “Financial Think” When Pricing
Beware the financial mind when it comes to pricing. Applying a percentage increase can create prices such as $924.68 — a terrible price psychologically. Also, charging cents on a product priced over $50 can make customers feel gouged. Source: The Tao of Pricing. See also: Pricing Psychology Report. #pricing #entrepreneurs
In Bed with your Competitors
You cannot get in bed with your competitors and agree on a 10% price increase. (Unless you wish to be jailed.) But you can announce a 10% price increase yourself. If your competitors don’t join you, you can always rescind it. Source: The Tao of Pricing. See also: 47 Ways to Raise Prices …Without LosingContinue reading “In Bed with your Competitors”
Wise Marketers
Wise marketers often let competitors know their intentions. A “we’ll meet any price” policy may convince your competitors of the stupidity of discounting their prices below yours. Source: The Tao of Pricing. See also: Pricing Psychology Report. #pricing #entrepreneurs
Desperate Competitors
A desperate competitor is likely to discount heavily to get SOME of its customers. Rather than meet ruinous prices — be a goodwill ambassador to your competitor’s customers. Let them ALL know about the discounts being given just to some … so they can also benefit. Those customers will thank you for looking out forContinue reading “Desperate Competitors”
Toot Your Horn (part 2)
If there’s a reason why you can price lower than your competitors — that is not related to cheaper quality — make sure your customers know about it. Else they will question your products’ quality. Source: The Tao of Pricing. See also: Pricing Psychology Report. #pricing #entrepreneurs
Toot Your Horn to Prevent Price Wars
If there’s a reason you can maintain a low price easier than your competitors, make sure they know about it. It could prevent their starting a price war. Example: All the PR Walmart sought & received at launch on Walmart’s innovative and cost-saving warehousing … was really just a warning to its competitors. It said,Continue reading “Toot Your Horn to Prevent Price Wars”
“Short” Numbers
Short numbers look smaller — even when they are not. Thus a price of $675.00 looks more expensive than $675. Source: The Tao of Pricing. See also: Pricing Psychology Report. #pricing #entrepreneurs
Relationship Marketers & Pricing
The relationship marketer desires information on customers to better market them in the future. One way to do this: Set prices high and offer discounts for providing more information. Source: The Tao of Pricing See also: 47 Ways to Raise Prices …Without Losing Customers. #pricing psychology #pricing strategy #entrepreneurs