Pricing is a matter of perception. Lets see how you can hack your way to higher conversion while also increasing the price.
1. Magic of 9
Marketers have used the magic of 9 for way too long. Look at the conversion rate of Gumroad.
You’ll notice that prices ending in .99 have higher conversion rates than prices ending in one cent higher.
Today $5 has become the modern equivalent of 99 cents. The sites like Fiverr work on the same principle.
2. Reduce the left digit by 1
In the above chart, you’ll also notice that for all positive results, the left digit has changed. Changing 3.99 to 3.98 won’t make a difference, but changing 3 to 2.99 will. When you reduce the anchor price, it makes a huge difference in the perception.
3. Prices with fewer syllables
Syllabic length influences the price perception. If it takes more time to read, the mind infers that the magnitude must be larger. This basically means that prices is perceived to be lower when it has fewer syllables.
4. Smaller font size for displaying prices
Customers perceive a price to be lower when it is visually small.
Also, display the discount value in larger font because you want to maximize the perceived size of discounts.
5. Remove the comma
Removing commas can make your price seem lower as it reduces the phonetic length of the price.
1,782- One thousand seven hundred & eighty two
1782- Seventeen eighty two
6. Separate shipping cost
Rs 250 +Free Shipping
Rs 220 +Rs 50 Shipping
With this tactic you can anchor comparison to the base price rather than your total price. When people make comparison across e-comm websites they’ll most likely take your base price in comparison.
7. Installment payments
This facilitates people who want to buy your product, but may not be able to afford it right now. By offering your Rs 18000 product for 6 installments of 3000, you are giving them a good nudge to buy now.
8. Precision with large numbers
Rs 278,531 or Rs 260,000
The precision makes it look like you have done your maths and that’s where this exact number is coming from. The buyer perceives that there is less room for negotiation.
Also, we tend to be precise in terms of small numbers (1,2,3). This association triggers an association with small numbers which leads to buying decision.
9. Round to an appropriate level
Researchers found that round prices work best for emotional purchase. However, you should still avoid round intervals like Rs 100, Rs 5000 because they look random and artificially high. Conversely, precise numbers work best with rational purchases.
10. Bias towards names & birthdays
This is a cognitive bias that can help you make more sale. Consumer's positive self association affects their evaluation of product prices. They tend to prefer prices that contain the same name-letter and birthday-number.More specifically, consumers like prices (e.g. Rs Sixty five) that contain digits beginning with the same first letter (e.g., “F”) as their own name (e.g. Suresh) more than prices that do not. Similarly, prices that contain digits (e.g. Rs 49) that correspond to a consumer's date of birth (e.g. 4th September) also enhance pric liking and purchase intentions.While quoting a custom price, it might not hurt to slightly adjust the price to match their name or birthday (perhaps after a quick glance at their Facebook page).
11. Displaying prices
Price can be displayed at different stages of decision making. The sequence of this display can affect the evaluation criteria. When products are displayed first, evaluation is based on the product qualities.When prices are displayed first, evaluation is based on the economic value.If you are selling luxury products, show the product first.
For utilitarian products, show the prices first.
12. High anchor price
When you start negotiating with higher precise number, it sets a high anchor, closing with a high selling price. One important factor here is being precise, e.g. Rs 6012. Consumers feel a round number (e.g. Rs 5000) to be random and feel the product is not worth it.
13. Any other high number
Anchoring works not just for the prices, but for any number. You should show any higher number before displaying your price.
14. Cannibalize your previous product
When you launch a new product, raise the price of your previous product. For technology products, people start valuing your new products more than your old version, helping you with more sales.
15. Prices on left or right
Rs 89 for 19 items or 19 items for Rs 89?
If the first item is price, people focus on cost. If the first item is quantity, people focus on benefits.
However, there are two caveats. The price-unit combinations should be such that unit price calculation should be difficult (not 40 item for Rs 20). And the item quantity must be greater than the price. For e.g. 89 items for Rs 29. Customers anchor on the higher quantity and think this to be an attractive deal.
16. Visual contrast
You can visually distinguish your price with font size & color.
17. Decoy pricing
In 2008, Economist offered 3 subscription options:
Web only- $59, Print only- $125, Web & Print- $125
Now who would choose print only option when you can have web as well for the same price.
The price in the middle, while seemingly ‘useless’ was actually useful in that it helped get customers to turn from ‘bargain hunters’ to ‘value seekers’. Without the middle option, the price points set by Economist had too much contrast. People looked at the two prices and tried to convince themselves that they didn’t need the ‘upgrade’.
Essentially, they became ‘bargain hunters’ rather than ‘value seekers’ which are the kind of customers you really want.
The Print only option here helps customers to make a comparison and recognise the value of Web & Print. The Economist generated 43% more revenue with this option.
You can use the same tactic to guide people toward the more expensive option. By adding a similar but worse option, you make your expensive product more tempting.
18. Remove the pain of payment
Consumers feel more pain when they see money leaving their hands. You should take a leaf from Uber’s playbook. There is no constantly running meter visible and the payment is automatically charged to your card. Use online payment to your benefit.
19. Bundling expensive and inexpensive product
When you bundle the two, inexpensive product reduces the perceived value of expensive products.
20. Discount amount or discount percent
Show percent when your price is under Rs 100. Rs 50- 10% offShow the amount otherwise. Rs 3500- Rs 350 This anchors the customers on higher numerical value of discount.
Use the research behind casino chips and gift cards. By creating the store wallet you can distort the perception of paying. To consumers, it won’t feel like they are actually paying. Once the money enters a separate medium, it won’t feel like money (and people will be more willing to spend it).
22. Product cost
Consumers tend to value your product more, when they are aware of your inherent costs.
Emphasize your product’s “top-of-the-line” raw material or any other cost-based input. This will trigger a more empathetic perception of your price.
23. Invisible price rise
You can potentially ‘creep’ your price up 2%, 5%, 8% without most people noticing. You can raise your prices more frequently like this. With more frequent price rises, you avoid reinforcing a concrete reference price. If your price stays the same for years, then people will become accustomed to your price at that specific level. Once you change your price, people will be more likely to notice and might cancel your subscription.
It also means that when you offer a discount, you’ll have to offer more than 10% to make people notice.
Hope this helps in creating your pricing page. Shout out if you need any help.