Tips and stories to add value to you and your organisation
Here are three top tips from the book Priceless, by William Poundstone. The book is both readable and useful and if you are interested in the psychology of pricing then this is the book for you.
Have a think about these points:
1. Low can be bad. If a price is set too low then people think something is wrong and don’t buy. The example in the book is cheap seats at the theatre, where people buy more expensive seats and ignore the cheapest seats. There is nothing wrong with them, but people are suspicious.
2. Add value with expensive items. Shops add high value items to their window display so that people feel they are buying into a more upmarket range. Think about how watches are displayed. Does your product offering have a high value item to add value to the cheaper offerings?
3. Ninety nine doesn’t work. Prices ending in 99 look like they haven’t been thought about and are simply marketing ploys. However if you end a price in a 4 or a 7 then people assume the price has been carefully worked out. They are less likely to haggle and more likely to pay up and feel the price is a reasonable one.
Next time you are out shopping think about the price of items and whether you are making a rational purchasing decision or are being gently seduced by clever pricing.
Next week: Branding tips
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