Business owners don’t always realize how important pricing is to sales. To get the most out of selling online, you have to know the tricks of the trade. And by this, I mean you need to understand the psychology of why we buy. Our emotions and thought processes all have an impact on what we purchase. By understanding how we think and applying it, you’ll be sure to increase your sales. Here are some of the coolest tricks to price products on your site to help you sell more online:
Use tiered pricing options
The majority of small business owners may go into a purchase planning to spend $20-30 a month on, say, some SEO software for their site. Keeping this in mind, offer tiered options that appear to satisfy every budget. For example, you could have the ‘Beginner’ option for $8, the ‘Novice’ option for $18, the ‘Professional’ option for $33, and the ‘Business’ version for $60 a month, with each option having increasingly better features.
This strategy works because no business owner wants to see themselves as a beginner or novice. The ‘Business’ version is on purpose way too expensive, which leaves the majority of people to pick the ‘Professional’ option. And there you have it, the customer has now spent more money than they originally planned in order to get what they see as the best deal.
Remember the eager spender
There are always people out there who will want to buy only the best for themselves. Having the most expensive item or product gives the sense that they are getting the best of what your company has to offer. To make the most of these people, always have a more expensive product that offers slightly more than what is considered reasonable. In my example above, this would be the ‘Business’ version of the SEO software.
Use the ‘decoy effect’
This has been psychologically proven to work, as simple as it sounds. Here’s an example used by a company selling textbooks:
First, they offer the PDF version of a textbook for $70.
Second, they offer the textbook in hardcover for $100.
And then, they offer both the PDF and the hardcover textbook for $100.
By using the comparatively bad $70 deal as a decoy, you now persuade the majority of customers to spend $100 when, otherwise, many would have only spent $70.
Limit the options and features
Sometimes, deciding what to purchase out of a selection of tiered options can be difficult. So difficult, in fact, that the customer would decide to abandon the purchase altogether because they simply aren’t sure what’s the best deal.
To avoid this, make your tiered options appear as clearly and simply as possible, while still conveying the right information. When describing each option, you shouldn’t use more than 6-8 bullet points to avoid overwhelming anyone.
Tap into humanity’s ‘Loss Aversion’
This powerful psychological principle is why we often feel more pain losing something than if we had instead gained the exact same thing. To use this trick, make your customers feel like they’re missing out if they don’t buy a certain product. Try using a limited-time-offer, or instead send messages to the customer emphasizing what they have to lose by not making a purchase, rather than what they can gain by buying things.
Loss aversion is also why free trials work so well- once a person has something and gets used to using it, they’re more likely to purchase it to avoid losing something they already have.