Lower prices relative to your competitors can cause your products/services to be perceived as less desirable due to lower quality. This is true particularly where quality is hard to ascertain. Example: A business newsletter was tested at $97 and $127 per year and received 11% MORE buyers at the higher price. That’s 45% more revenue.Continue reading “Lower Prices”
Tag Archives: Entrepreneurs
Riches are Available
Riches are available in overlooked prices. In industries with a menu of prices dependent upon features, the market often judges rate increases by a single option. Give that rate a lower increase. Raise others more. Example: Advertising rates are announced by the 1 time B&W or 1 time 4C rates. Fortunes have been made byContinue reading “Riches are Available”
Purchasing Agents
Purchasing agents may lie about your competitors’ prices. The wise marketer agrees to meet competitor prices ONLY if the purchasing agent puts them in writing. Source: The Tao of Pricing. #pricingstrategy #pricingpsychology #entrepreneurs
Getting a higher price
When do consumers consider $895 for a refrigerator a better price than $825? If the $895 is discounted from $995. Source: The Tao of Pricing. #pricing psychology #pricing #entrepreneurs
Buyers Hate Price Increases
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”
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 #pricing psychology #pricing strategy #entrepreneurs
Free Samples
Free samples of compelling products build life-long customers. Examples: Food in grocery stores, free chapters of books, free first novels in a series, or free samples of almost anything used frequently. However… this technique is so powerful society must beware when the product is addictive, e.g., cigarettes and hard drugs. #pricing #pricingpsychology #entrepreneurs
Pricing for Business Prospects
If business prospects can accurately measure the the sales your product delivers, give discounts or even a free sample so they’ll try you. Example: A direct-response advertiser will buy frequent ads IF the ads make them money. Show them — with a free ad if necessary — your blog/publication/website will do so. Source: The TaoContinue reading “Pricing for Business Prospects”
Wondrous Rebates
A rebate is a wondrous thing. It lets you discount your price ONLY to your most price-sensitive customers. How? Because only customers worried about the price will take the trouble to redeem one. Source: The Tao of Pricing. #pricingpsychology #pricing #entrepreneurs
Negotiating Prices
If you must negotiate prices… consider only price requests accompanied by a signed order for the product at that price. Source: The Tao of Pricing #pricing strategy #pricing psychology #entrepreneurs