The Pricing Masters... an intensive
5-Day e-mail course on
finding the Perfect Price that will
maximize your profit.
If you have a friend who would benefit
from taking this
course, please pass this on. Or
tell that person to receive
the 5-day course by sending a blank
Refer to this course whenever you
price new products and
monitor or upgrade existing ones.
Print each e-mail out,
pour yourself a beverage of choice,
bring along a pen to jot
down some ideas, and take it all
to your favorite sofa. This
is serious stuff -- pricing makes
or breaks many products.
So get into a comfortable spot for
Thu Feb 01 01:25:24 2001
Pricing Masters Course 303
3 of a 5 day e-mail course. This
is our "over-the-hump"
day. Then we cruise to the finish
line. How appropriate
that our topic of discussion for
this session is...
the psychology of pricing.
get you "pysched" -- but
not "psycho" ;-) for today's
information, let's consider the
power of the following
the arranged smell of fresh-baked
bread in a house to
ignite childhood memories of food
or family in the
fresh flowers/produce near the grocery
to encourage impulse buying -- something
that's not "on the
big sale signs at the back of the
boutique to force the
customer to walk by all this season's
the offer of free money or big prizes
on the Web site in
order to get the visitor's click
four strategies above involve pyschology.
It's a reality
in the business world today. You've
got to be able to get
inside your customer's head. And
not leave one empty space
for your competitor! It's a race
for "share of mind."
is no exception. Reflect on the
psychology in our
guiding e-commerce statement...
The Perfect Price (tm) is that
price that maximizes your profits
while building a lifetime
customer through value satisfaction.
How do you define "value satisfaction"?
By putting yourself
into your customers' shoes -- simple
but often ignored advice.
Sometimes a vendor thinks that s/he
knows what's best for
the customer. Let's call it the
you reverse your viewpoint by coming
at it from your
customer's angle, then you start
to look at your product
differently. (That's the funny thing
it works on both sides of the business
to attract those first-time customers
and let the value
of your product "keep"
them with you for a lifetime.
where do you start? That's as easy
The most common pyschological technique
is to use a
price that ends in any number but
0 or 1. We all know how
much better 99 cents sounds than
$1.00 -- and $997 in
comparison to $1000. How W-I-D-E
that narrow gap is to our
customer feels like the saving is
MUCH more than 3
dollars... And s/he credits that
"good feeling" to you,
vendor. This effect happens even
more so with the next
the customer the great feeling
of getting something for nothing.
Here products that have a
logical association with one another
are grouped together
and one price is set for the combination.
is a powerful method if the price
bundle equals the price of the most
Yup, you know,the refrain...
would've paid that much just for
value-bundled Make Your Knowledge
Sell! (MYKS!) to the
extreme. MYKS! shows you how to
find "the infoproduct
within," how to create and
publish it, and how to market and
sell it. It's under one single "MYKS!"
roof. You need
*absolutely* nothing else to succeed
at selling what's in
we had stopped there, the value
alone would be terrific.
But we didn't stop there...
added 7 more indispensable tools
-- so MYKS! is actually
"The Complete Infopreneur's
Toolkit" and not just a book.
It even includes a half-hour consultation
Monique Harris, infopreneur extraordinaire...
15%, 25%, 40%... how much louder
that price tag seems
to scream as the percentage grows.
You bet, it catches
the ear and eye of the customer.
a) build existing customer loyalty.
This is so easy on
the Net. You can reach previous
customers with a quick
e-mail and offer them a price reduction
on your new product.
emphasize the point, set up a special
discount url for
this select group (which, of course,
should include your
deserving affiliates.) Show your
encourage or reward bulk buying.
Go beyond the obvious
reduced "per unit shipping
charge"... offer "three
(or better, $19.95) for that $7
bottle of wine. Sure, the
margin is a bit less... but your
gross is much better.
customer saves on shipping, product
cost, and gets that
Runder $20 psychological boost.S
And your competitor?...
well, thatUs two bottles of wine
that he's not selling to
compete with your competitors as
in the case of seasonal
deals or for special markets like
seniors and students.
Who can turn down a good deal? Not
me (at least that's what my
can be a strong tool. But it's not
own Achilles' heel...
your goal clearly, before you discount.
youUre just giving money away. Who
can afford that?
The third pricing approach uses
the pyschology of
perception. You know that truism...
Quality is in the eye of
the beholder. And where does "the
eye" land on the Net?
That's right. On your Web site.
your site makes a great sales effort,
you will be able to
build a higher perceived value.
And that will support a
higher price for your product. It's
*worth* it to the
is IMPORTANT -- if you sell via
the Web, one of your
site's most important functions
is to build perceived value.
As we will see later, you willactually
be able to measure
this via the Make Your Price Sell!
that value is, when it comes to
selling on the
price beyond the value that your
creates and that your product supports.
Not if you want to
build a successful, growing, long-term
business, that is.
The final strategy examines price-sensitivity.
I call it
"rubber band" pyschology.
Customer perception comes
into play again, as well as competition
on the market.
demand for your product drops when
you increase the price
by only 1%, you have a product that
is very price-sensitive
on the other hand, doubling the
price only causes a
slight drop, you have a price-inelastic
product -- that
means that it almost doesnUt matter
what price you charge
because people will still buy it...
limits, of course.
Make Your Price Sell! finds those
is also referred to as "price-resistance."
MYPS! shows you by the use of a
line graph how demand for
your product reacts to changes in
I am getting ahead of myself. It
must be the "hump"
effect. The height is letting me
see into the 5th day. :-)
That's it for the psychology of
the key point? No matter what approach
you use, it
has to "ring true" to
the customer. S/he will only be
attracted to your price and product,
if it's *worth* it.
here's my psychological ploy for
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Contact info: E-mail us at [email protected]
Written by Ken Evoy, M.D.
(c) copyright 2000, 2001 SiteSell.com
Perfect Price and Teeter TM GoodBytes.