The Psychology of Online Product Pricing
This is the age where online retail is in boom all over the world, one needs to understand how one can run a successful eCommerce shopping portal that contains strategically priced products and services. We have seen certain trends in human where they get inclined to a particular type of prices. This is commonly known as the psychology of pricing.
Understanding the psychology of online pricing and discounts will help you to increase the rate of conversion and customer purchase as well as your revenue. Here we will discuss some of the ways to price your products in your eCommerce web-store so that customers get inclined to them and spend more.
Focus on “Free”
It is the inborn tendency in human to get excited by seeing the word “Free” on some product. This will make people think and plan to buy the product even if they have never thought about it in the first place. You can easily capture customers’ attention just by including a “Buy 1 Get 1 Free” offer on your product. This is the most eye catching offer that people tend to definitely get attracted.
It is also good to offer free shipping in your eCommerce websites. Remember that people become ready to buy a product just because they are ready to pay the amount they first see on the product tagline. It gets mentally set in your shoppers. But when suddenly they come to know that they have to still pay more to get that product make them think again about the purchase and ultimately skip it. Make them feel that they don’t have to pay additional charges during checkout this will motivate them to move forward to make the purchase.
The # 9 concept
Today, most of the online product prices end with .49 or .99. This is commonly referred as the “left digit effect” by the psychologists. In this case the customer focuses on the first digits and rather than rounding up they round it down. For example, an item with its original price $100 when offered at the price of $99.99 psychologically make people consider the price as $99.00. Thus, just a difference of $00.01 makes the customer think it as a difference of $1.00. This makes a great appeal to the customers and makes them buy it instantly.
Find out yourself what is best for you
It is always good to find it out yourself what works best for you. It is good to run AB testing on the products to check which pricing prompt more customers to make a purchase. It is good to test using different techniques regularly to see if your customers’ shopping behavior change or not.
Utilize the Importance of Time over Money
Psychologists consider that selling time over money will offer more benefits in case of online product pricing. People tend to feel a personal touch when referring to time and experience, and this leads them to have a favorable attitude towards purchasing. A product with a same day delivery option will have more impact than a product with some discount. Research shows that sales done with emphasis on time attracted twice customers than compared to price.
Impact of “Useless” Pricing
The differences between pricing points also have a great impact on the customers and their value of the product. This will also impact how they get persuaded to buy. For example, consider two related products A and B are priced $60 and $100, and the third product, a combo of A and B is also priced $100. Even though it does not make any sense as the price of the product B seems “useless” as people will think that it is better to get the combo for the same price. The fact is that it is the price of the product B (even though it is useless) that makes people put their focus on combo product. It offered a value than a bargain as people started comparing the two options and making the combo as an excellent deal. Without the product B in option, people might get satisfied with just product A or think of not making any purchase at all.
The influence of the price of one product with a similar product may help you improve the sale of that product. For example, you may not be planning to have a large sale of your premium products. But just by presenting them next to the product you really aim to sell can have an impact on the customers and increase the sale.
Think and implement some of these in your business and find the change.
[We are Connecting Dots, a full service eCommerce solutions company. At Connecting Dots, we help companies build great online businesses, we are Magento implementation partners and build great eCommerce portals]