The Psychology of Pricing: A Gigantic List of Strategies (5)
Just stumbled upon this article that showcases 29 pricing strategies and tactics and explains the principles behind them with academic citations included. There are quite a few of them that are being used by affiliate marketers and businesses daily and I found it interesting to read and understand the science behind it. Also, there should be something new for everyone.
We all know these sales letter going like "How I made $132,789 in 2 months without any work", right?
Explanation:
Tactic 11: Be Precise With Large Prices
Thomas, Simon, and Kadiyali (2007) analyzed 27,000 real estate transactions. What did they find? Buyers pay more money when prices are specific (e.g., $362,978 vs. $350,000).
Is it because of the negotiation aspect? If someone asks for a very specific price, wouldn’t potential buyers perceive less room to negotiate?
That’s what I thought. But nope. Researchers ruled out that possibility. Surprisingly, the real culprit involved priming a small magnitude.
Think about it. When are you more likely to use a precise value? Answer: when you’re dealing with small numbers (e.g., 1, 2, 3).
Due to the association between precise numbers and small values, precise numbers trigger an association with small values, thus influencing people’s perception.
Bonus Tip: Since a house is a rational purchase, you could enhance the psychological impact by using a precise, non-rounded number (e.g., $362,798.76)
Thomas, Simon, and Kadiyali (2007) analyzed 27,000 real estate transactions. What did they find? Buyers pay more money when prices are specific (e.g., $362,978 vs. $350,000).
Is it because of the negotiation aspect? If someone asks for a very specific price, wouldn’t potential buyers perceive less room to negotiate?
That’s what I thought. But nope. Researchers ruled out that possibility. Surprisingly, the real culprit involved priming a small magnitude.
Think about it. When are you more likely to use a precise value? Answer: when you’re dealing with small numbers (e.g., 1, 2, 3).
Due to the association between precise numbers and small values, precise numbers trigger an association with small values, thus influencing people’s perception.
Bonus Tip: Since a house is a rational purchase, you could enhance the psychological impact by using a precise, non-rounded number (e.g., $362,798.76)
http://www.nickkolenda.com/psycholog...ng-strategies/
Which of those tactics are you applying in your own business?
Sweet!
Awesome find, thank you.
Very interesting. Thanks
Brilliant!
Home > Technical & Creative Skills >