Pricing perception highlights

Consumer psychology influences how companies set their prices. Below are some behavioral insights that are worth considering while pricing a product or service:

• A highly priced product often generates a greater perceived value and can potentially attract more buyers.

• A low-priced product can turn off customers, who will perceive it as less valuable.

• Simply having more than one pricing option, particularly when one seems very expensive, can drive customers to pay for the more affordably priced option.

• People associate ‘charm’ prices, which end in 9 with discounts and better deals (e.g $10.9).

• People perceive prices to be smaller when they contain fewer syllables.

• Buyers pay more money when prices are specific (e.g. $36.6 vs $31).

• Round prices (e.g., $100) are processed fluently, whereas non-rounded prices (e.g. $98.7) are processed slower.

Sources: Best Practices for Pricing SaaS Products, Nickkolenda, Quicksprout.