Pricing Insights Help Overcome Customer Irrationality

Pricing Insights Help Overcome Customer Irrationality

Inc.com has some « Pricing Rules You Need to Know » to help « make the most of customer weirdness » — i.e., irrationality about pricing. Their ABCs of Pricing states, « Buyers are irrational. Predictably so, » detailing « three of the frameworks — ‘anchors,’ ‘bumps,’ and ‘charms’ — they use to decide what they’ll pay for your product or services. »

Querying consumers on their perceived value of a product is unreliable because they « frequently don’t know what things are worth, and their stated preferences frequently don’t match their real-world actions. But simply taking your best guess and slapping a price tag on something usually means you’re leaving money on the table. »

Some of Inc.com’s recommendations:

• ConversionXL, which « recently rounded up a wealth of tips on pricing all grounded in science to help business owners decide what to charge for their products. »
• Use a decoy « that’s clearly inferior » as buyers « often decide on purchases by comparing them to other options. »
• Show buyers the deal by listing the original price on sale stickers.

Many more insights are shared in the full original post.

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