Playbook

7 Powerful Pricing Strategies

 

Maryam Merchant • by Maryam Merchant

 

Marketers use psychology. The prices they put on products make us crave buying expensive ones. We don’t realize it, but they are playing with our minds very smartly.

They grab the attention of customers by showing three prices sometimes, and we either buy the cheapest or the expensive one. There are very few who take the middle one.

If you are a marketer, you need to know how different companies are playing with our minds and grabbing the attention of customers with the psychology of pricing.

The psychology of pricing can reap many benefits if used smartly. Here are seven different examples that can make you understand the marketing strategy of companies, and the way they are earning profit.

 

1. Popcorn Pricing

Popcorn in a classic red and white carton.

Photo by Pixabay from Pexels

Movie time in the theatre means you need food to keep you company for the next couple of hours. In many ways, cinema has been broadened but popcorn has remained constant for decades. It’s constant for a reason — there’s a marketing strategy involved.

Suppose, there is a small and large size of popcorn. The small one is $2 and the large one is $8. At these prices, most people will take the small one. But if they add another category, medium, which costs $7, most people will buy a large one, since it’s only a dollar more than the medium.

This strategy can be used for many products, like for mobile phone prices with different storage spaces like 64GB, 128GB, and 256GB.

 

2. “One Weird Trick” Banners

“Smaller Waist in 7 Days”

Photo from YouTube

There are many “One Weird Tricks” banners. At times they are scams, but we try to click on them. It’s human nature.

The ads may be like “a quick way to reduce your belly fat”, “learn a new language in a week”, “boost your credit score by 200 points”, or “one spice that will cure your diabetes”. All these ads show the best image and attract customers with the styling of their words.

This way, many multimillion-dollar businessmen become successful because they attract people with emotions and people get curious to click.

 

3. Restaurant Menu Designs

A restaurant menu.

Photo via businessworld.in

Menu design has the ability to increase profit and grab the attention of customers on profitable products.

What they do is:

•Place the high margin items in the golden triangle. This is the area of the menu that customers read first. Their eyes directly move to the middle first, to the top right corner, and then finally to the top left.

•Highlight one high-paying item per category.

•Have limited choices.

•Group complementary dishes together.

•They show one really expensive item to customers, not because they should buy that product, but that item makes people think the other items look cheaper. So people go for the cheaper one but it’s not actually cheaper.

•Sometimes the special menus show the item which is usually made with the ingredient that the restaurant has too much of and is trying to get rid of.

 

4. Odd-Even Pricing Strategy

A price sticker.

Photo via reflexsignholder.com

Odd-even pricing is a sort of psychological pricing strategy to grab people’s attention. It shows the change in the number of the last digit of the product and service pricing. Odd pricing ends with odd numbers, such as $1.99 or $9 and even pricing is $10 or $2.50.

For example, a $100 item marked $99 is perceived as cheaper because $99 is in two digits and not in three digits. So people think it’s cheaper but actually, it is not. That’s the drill of marketing.

This sort of pricing uses human motivation to drive customers to take action. They use charm pricing to give a psychological effect on the human brain.

 

5. Limited-Time Offer Strategy

An example of a limited-time offer.

Photo via rocketspark.com

It’s a sort of urgency which marketers create for their products to drive traffic. You must have come across many offers which specify the start and end date of discounts. They say save 50% of your money and use words like:

Hurry up.

It’s your last chance.

Don’t wait!

Get your product with the cheapest discounts and make the most of it. Such offers let you pause for a minute and get you into action to take the best deal as early as possible because it will vanish after the date is gone.

This way, marketers drive sales for their businesses. So even you can do the same for your products and let consumers feel that they’ll miss the best opportunity if they don’t buy.

 

6. Gift Cards

Amazon gift cards.

Photo via mygiftcradsupply.com

Gift cards are another marketing strategy people use to increase their profit. They attract customers by saying spend a certain amount and get a gift voucher of $50.

This way, people tend to grab a few extra items and meet the threshold to get that free $50. People are hungry for gift cards as it looks fancy and eye-catching.

The other thing is, some gift cards have a limited time to use them. Some say use within a few months or years to get your reward. We get excited and spend another chunk of money to use that gift voucher. Remember, this was not a present for you but a way for them to increase their profit.

This way, marketers promote their brand and increase their revenue significantly.

 

7. Commemorative Dates

A pile of presents.

Photo by Pixabay from Pexels

Smart use of commemorative dates takes your business to another level. The commemorative dates are Christmas, Mother’s Day, Black Friday, Easter, and other special dates.

On such an event, marketers boost their sales based on specific niches. For example:

  • Valentine’s Day: They offer products based on couples.
  • Black Friday: They offer sales on digital products.
  • Children’s Day: They offer products on children’s toys.

Marketers grab consumer attraction based on specific niches. And right now, Christmas is around the corner, so think of all such products marketers are using to grab your attention.

 

Final Thoughts

Marketing to customers means targeting emotions, as people are connected to their emotions. These types of marketing aren’t scams, but this is how marketing works. It’s that simple. It’s not wrong or right but this is the best strategy for marketing.

You can apply any of these strategies to your sales and reap the benefits because every strategy can be applied in some way.