irrational pricing

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The psychology of pricing: why your customers are willing to pay more than you think.
How you can use it to your advantage in your pricing strategy?

 

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Price anchoring is when a business shows a higher-priced product or service next to a similar but lower-priced one.

This higher-priced product is known as the anchor, and it can make the lower-priced product seem like a bargain by comparison.

 

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One famous example of price anchoring is the menu technique used by many restaurants.

By placing a high-priced entree next to a slightly lower-priced one, customers are more likely to choose the latter, thinking they’re getting a good deal.

 

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Price anchoring can also be used in e-commerce. Amazon, for example, often shows a “list price” next to the current selling price.

This list price serves as the anchor, making the lower price seem like a better deal.

 

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Another way to use price anchoring is to offer a premium or “deluxe” version of a product next to a standard one.

The premium version serves as the anchor, making the standard one seem like a more reasonable option.

 

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So how can you implement price anchoring in your own pricing strategy? First, identify a product or service that you want to sell more of.

Then, create an anchor product that is higher-priced but similar in some way. Display them side by side.

 

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Keep in mind that the anchor product shouldn’t be so high-priced that it turns off customers. It should be just high enough to make the other product seem like a good deal.

Experiment with different anchor products to see what works best for your business.

 

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By using price anchoring in your pricing strategy, you can potentially increase sales and revenue.

But remember, it’s just one tool in your marketing arsenal. Don’t rely solely on price anchoring to drive sales.

 

 

You're leaving money on the table

I publish a few case studies every month. I choose a product/service in each case study. I explain how they will increase their revenues with their pricing strategies.

 

Learn to increase your revenue by designing your pricing with behavioral psychology.

It’s free.