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Psychological prices: what they are and 5 strategies explained with examples

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Psychological prices: what they are and 5 strategies explained with examples

Is there a way to sell more without changing your product? There is a simple option that can make a difference: it is psychological pricing . If you’ve ever wondered why 99 is used, how rounding influences or what is the most effective way to price a product or service, in this article I propose 5 psychological pricing strategies , which are commonly used by different Communication Directors Email Lists brands to position your products and increase sales .

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list_altIndex of contents
The importance of price
What are psychological prices?
How does psychology affect the purchase?
5 psychological pricing strategies with examples
The importance of price
Price is an important part of everything related to a product or service, mainly because it positions it. Changing the price can be a differential factor to change, also, sales. But to know what is the right price , some variables must be taken into account: market, costs, competition, brand awareness …

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Another important factor is the fact that the customer is not 100% informed of the price and there is usually the perception that the higher the price, the higher the quality . But it is also true that the consumer takes into account many other aspects when evaluating a product, such as convenience in purchase.

For example, a customer of a 24-hour supermarket will understand that prices are higher, since the consumer prioritizes hourly availability over price.

Regarding the psychological prices, it seeks to appeal to the consumer’s emotions to sell more without having to modify the production costs of the product . I invite you to continue reading to learn more about this interesting (and effective) strategy.

What are psychological prices?
Can you imagine that, in some cases, raising prices can increase sales ? The psychological prices used an emotional response from the customer to promote sales and serve to sell more without costs reduced.

Psychological prices work because they are based on the theory that certain prices have a psychological impact on the consumer . Only with a small reduction or increase of a few cents can we achieve a great impact on sales.

How does psychology affect the purchase?
The vast majority of the decisions we make in our day to day are unconscious . Buying is also one of them. The neuro marketing study how it affects the perception of our environment to our purchasing decisions, seeking to stimulate our senses to get more sales.

In fact, it has been shown that stores with certain types of music, specific smells or the decoration of the premises can sell more, since an emotional relationship is established that achieves this effect .

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5 psychological pricing strategies with examples
As I said, psychological pricing strategies seek to establish the most appropriate price for each moment of purchase and type of consumer. Here are the five most common psychological pricing strategies. Each one is accompanied by a real example, since they are strategies that we find every day in our Forex Email List or physical purchases:

Round price
Odd price
Usual price
Relative price
Prestigious price
1. Round price
The first psychological pricing strategy that I will explain to you is the round price. It is based on including a round price so that the consumer perceives that their purchase decision is perfect and does not have “rational” doubts about the purchase, although in reality it is an emotional and not rational purchase, a whim, something that they do not need .

This strategy is widely used in “snacks” or quick appetizers, and even in gourmet products , as we can see in the three photographs:
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2. Odd price
Odd pricing is one of the most widely used pricing strategies, and it has also been proven effective. It’s about playing with your brain’s perception of prices. It can be used in two ways:

Establish a price with odd numbers : these are numbers that attract our attention the most and, in addition, give us the feeling that the product is cheaper or is on sale.
Do not use round numbers but ends in 9 : subtracting a euro or even a single cent we can make the consumer perceive that the price of the product is much lower. This happens because we read from left to right, and reading € 100 is not the same as € 99.99. The second option seems to us automatically cheaper.
In this case we have two examples. The first, of a cosmetic gift product that practically costs € 70, but we perceive it as cheaper, we read “€ 60 with something”:

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The second example is of a product for the kitchen that we perceive as € 7 with “something” but only 1 cent is missing for the € 8.

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3. Usual price
If we have been consuming a certain product for many years, we will already be used to its price and even to preparing the exact amount. We would be surprised if the price changed from one day to the next. It would even generate a feeling of distrust in us.

In these cases the consumer does not stop to think if the price is cheap or expensive. You simply pay for it and are not questioned. Therefore it is better not to touch it.

As an example we can have the newspaper that we have been buying for years and we acquire every morning at the newsstand. Wouldn’t it be strange if without justification from one day to the next they changed the price?
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4. Relative price
When we price our product, we must not forget how it will be presented to consumers. Surely our product will not be sold “alone”. In most cases you will be surrounded by competitive products. And deciding the price of our product without considering the prices of the competition would be a serious mistake.

If we want our product to be considered “cheap” or “expensive” we must decide its relative price : decide a higher or lower price than the competition. The perception of our product will also influence the distribution in the store, because it depends on how it is located that consumers will perceive it in one way or another.

In the example below we have several headphones with very different prices. The price, for a non-expert consumer, will quickly get an idea of ​​which headset is cheaper and which is more expensive. We all agree that the € 33.99 headset is much cheaper, right?

Let’s imagine that this headset was presented alongside a € 15 headset. Would it seem expensive then? Surely yes.
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5. Prestigious price
Don’t you automatically think that one product is better than another the same if it is more expensive? Companies know this, and therefore, by putting a high price on a certain product, they get the customer to perceive it of higher quality compared to the competition.

This strategy serves to attract those consumers who feel identified with greater purchasing power and social status, who will prefer the product with a prestigious price.

For example, in a supermarket we can find these two sliced ​​breads. We will agree that the product itself is practically the same. However, the bread on the right is worth three times as much! And with the same amount of product. Thus it manages to attract those consumers who are looking for the best quality and feel that they are buying a recognized brand.
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We have seen the five most common and most used psychological pricing strategies by companies. As a summary I would like to emphasize some points:

To establish the price of a product we must not only look at costs.
We must review the competition and how the product is presented to the public.
We must take into account the psychology of consumers, that is, what they are looking for with that purchase. Depending on whether it is a necessary or unnecessary purchase, emotional or non-emotional, we can use different psychological pricing strategies that will help us in the sale.
The key is to use psychology to your advantage. Thanks to the tricks used in this article you can increase the sales of your product, you just need to be attentive to your consumers and, if necessary, try different prices until you find the one that works best.

And you, what psychological pricing strategy are you carrying out? Which one gives you the best results? I will be happy to read you in the comments.

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