What is psychological pricing? Strategies and examples
Posted: Wed Jan 22, 2025 10:34 am
Have you ever left a store with more items than you intended to buy because you found a deal that seemed irresistible? Don't worry, it's common and is due to the psychological pricing strategies that some stores use to encourage us to buy more.
Typically, these are prices like $3.99, which seem much lower than $4; customers translate this as $3 because they tend to process the price from left to right. This is why they place less importance on the last digits in the price.
Pricing strategies are a fundamental part of marketing and represent a guide to increasing sales and growing your business. Establishing a pricing strategy that favors you is key to achieving the sales goals you have set for yourself.
What is a psychological price?
Psychological pricing is a marketing practice used kenya whatsapp lead retailers to set prices lower than a whole number . This strategy is based on the theory that certain prices have a greater psychological impact on customers than others.
What is a psychological price
Psychological pricing strategies focus on consumer emotions. The value that consumers perceive in a product or service has a significant impact on their purchasing behavior . Consumers are governed by their thoughts, motivations, and needs, so their decision-making process is often volatile and dynamic. In this case, social influence is key when responding to psychological pricing.
In general, prices represent automatic connections with consumers, which can provoke both positive and negative reactions. Thus, generating an effective pricing strategy can increase your business sales and attract more customers.
Why do psychological prices work?
In a study conducted by the University of Chicago and MIT, they tested the effect of rounding digits. Prices were set at $34, $39, and $44. The best-selling items were those priced at $39, even though there was a lower price available.
That’s why the “9-factor” pricing strategy is one of the oldest and most widely used pricing practices. As we said at the beginning of this article, consumers perceive that prices with 9 or .99 at the end are usually better and cheaper deals than whole numbers.
Psychological pricing is a designed strategy that directly influences consumer behavior and purchasing decision through emotions. A study has highlighted that certain ways of setting prices can trigger a response in a customer’s subconscious and encourage their purchase .
That's why we're giving you some tips below that can help your psychological pricing strategy achieve positive results.
6 strategies to create psychological prices
Psychological pricing, besides being an easy and inexpensive strategy to implement, also increases the effectiveness of your pricing strategy. Below we share some points that you can take into account when creating your strategy.
1. Avoid integers
This is one of the most commonly used techniques in psychological pricing; in fact, few companies use rounded numbers to set their prices. The use of digits gives the consumer the impression that the normal price has been reduced and, therefore, the illusion that they are paying less.
2. Differentiate the cost of shipping costs
You can display the price separately, that is, show the cost of the product, which is usually less than what it will cost with shipping. However, at some point in the purchase, you must show the total cost, before the sale is finalized. This strategy attracts more customers interested in your product and drives them away from the competition.
3. Divide the total cost
Dividing the total price of your product or service into deferred installments can make it more attractive to consumers. This strategy works when the cost of the products is very high: it is not the same to see that the price for an all-inclusive beach trip costs $12,500 or to know that you can cover the installment in 5 monthly payments of $2,500.
4. Set fixed prices for periods
This strategy is very common for streaming services, such as Netflix, which has a fixed monthly cost for the use of its service. In this way, the consumer gives less importance to the impact that paying for this service has over a longer period and pays for it for a fixed monthly fee.
In this case, it is important to be clear about the specifications regarding subscriptions and cancellation of plans. A good price offer can be affected by poor communication of the legal terms, which could decrease your sales.
5. Highlight the discounts
If you have made a discount on the original price of your product, it is important to highlight it so that the consumer can see it. When a customer realizes the savings that come with buying that product, they will understand the benefit of their purchase and will not hesitate to spend on it.
The order of the numbers is important, as is the color and size of the font. That's why the final price should stand out from the original reference price. If you want consumers to avoid confusion and have a positive understanding of your message, position the prices in the right place and form.
6. Use percentages
Percentage is a resource that helps highlight promotions on products. This allows consumers to compare offers regardless of price. Remember to specify what the savings percentage is.
6 examples of psychological pricing that works
Seasonal sales and big deals are some of the examples where psychological pricing is used to attract consumers. Here are some paradigmatic cases:
1. Walmart (Black Friday)
The phenomenon of “Black Friday” is a great example of how psychological pricing is used to trick consumers. This sale is held annually, specifically on Thanksgiving Day in the United States, and is designed to attract the largest number of consumers to stores.
For Walmart consumers, Black Friday represents the day with the best deals on the market. This is due to its good psychological pricing strategy that manages to sell products that are out of season or that have not yet been released on the market, as a layaway.
Black Friday deals are marketed as “limited time” deals, which makes sales even bigger. The fear of missing out on an amazing deal drives consumers to stores during this season to get products they might not otherwise be able to purchase at any other time of the year.
<< Calculate the revenue you would earn with each pricing model >>
This phenomenon is called “impulse buying” or “ impulse buying ”; it occurs when there is a psychological influence that encourages consumers to buy another item, after a previous purchase. It is the way that many stores attract millions of people to shop during this holiday season: perhaps consumers who came there because of an attractive offer end up buying more products that they had not considered.
Typically, these are prices like $3.99, which seem much lower than $4; customers translate this as $3 because they tend to process the price from left to right. This is why they place less importance on the last digits in the price.
Pricing strategies are a fundamental part of marketing and represent a guide to increasing sales and growing your business. Establishing a pricing strategy that favors you is key to achieving the sales goals you have set for yourself.
What is a psychological price?
Psychological pricing is a marketing practice used kenya whatsapp lead retailers to set prices lower than a whole number . This strategy is based on the theory that certain prices have a greater psychological impact on customers than others.
What is a psychological price
Psychological pricing strategies focus on consumer emotions. The value that consumers perceive in a product or service has a significant impact on their purchasing behavior . Consumers are governed by their thoughts, motivations, and needs, so their decision-making process is often volatile and dynamic. In this case, social influence is key when responding to psychological pricing.
In general, prices represent automatic connections with consumers, which can provoke both positive and negative reactions. Thus, generating an effective pricing strategy can increase your business sales and attract more customers.
Why do psychological prices work?
In a study conducted by the University of Chicago and MIT, they tested the effect of rounding digits. Prices were set at $34, $39, and $44. The best-selling items were those priced at $39, even though there was a lower price available.
That’s why the “9-factor” pricing strategy is one of the oldest and most widely used pricing practices. As we said at the beginning of this article, consumers perceive that prices with 9 or .99 at the end are usually better and cheaper deals than whole numbers.
Psychological pricing is a designed strategy that directly influences consumer behavior and purchasing decision through emotions. A study has highlighted that certain ways of setting prices can trigger a response in a customer’s subconscious and encourage their purchase .
That's why we're giving you some tips below that can help your psychological pricing strategy achieve positive results.
6 strategies to create psychological prices
Psychological pricing, besides being an easy and inexpensive strategy to implement, also increases the effectiveness of your pricing strategy. Below we share some points that you can take into account when creating your strategy.
1. Avoid integers
This is one of the most commonly used techniques in psychological pricing; in fact, few companies use rounded numbers to set their prices. The use of digits gives the consumer the impression that the normal price has been reduced and, therefore, the illusion that they are paying less.
2. Differentiate the cost of shipping costs
You can display the price separately, that is, show the cost of the product, which is usually less than what it will cost with shipping. However, at some point in the purchase, you must show the total cost, before the sale is finalized. This strategy attracts more customers interested in your product and drives them away from the competition.
3. Divide the total cost
Dividing the total price of your product or service into deferred installments can make it more attractive to consumers. This strategy works when the cost of the products is very high: it is not the same to see that the price for an all-inclusive beach trip costs $12,500 or to know that you can cover the installment in 5 monthly payments of $2,500.
4. Set fixed prices for periods
This strategy is very common for streaming services, such as Netflix, which has a fixed monthly cost for the use of its service. In this way, the consumer gives less importance to the impact that paying for this service has over a longer period and pays for it for a fixed monthly fee.
In this case, it is important to be clear about the specifications regarding subscriptions and cancellation of plans. A good price offer can be affected by poor communication of the legal terms, which could decrease your sales.
5. Highlight the discounts
If you have made a discount on the original price of your product, it is important to highlight it so that the consumer can see it. When a customer realizes the savings that come with buying that product, they will understand the benefit of their purchase and will not hesitate to spend on it.
The order of the numbers is important, as is the color and size of the font. That's why the final price should stand out from the original reference price. If you want consumers to avoid confusion and have a positive understanding of your message, position the prices in the right place and form.
6. Use percentages
Percentage is a resource that helps highlight promotions on products. This allows consumers to compare offers regardless of price. Remember to specify what the savings percentage is.
6 examples of psychological pricing that works
Seasonal sales and big deals are some of the examples where psychological pricing is used to attract consumers. Here are some paradigmatic cases:
1. Walmart (Black Friday)
The phenomenon of “Black Friday” is a great example of how psychological pricing is used to trick consumers. This sale is held annually, specifically on Thanksgiving Day in the United States, and is designed to attract the largest number of consumers to stores.
For Walmart consumers, Black Friday represents the day with the best deals on the market. This is due to its good psychological pricing strategy that manages to sell products that are out of season or that have not yet been released on the market, as a layaway.
Black Friday deals are marketed as “limited time” deals, which makes sales even bigger. The fear of missing out on an amazing deal drives consumers to stores during this season to get products they might not otherwise be able to purchase at any other time of the year.
<< Calculate the revenue you would earn with each pricing model >>
This phenomenon is called “impulse buying” or “ impulse buying ”; it occurs when there is a psychological influence that encourages consumers to buy another item, after a previous purchase. It is the way that many stores attract millions of people to shop during this holiday season: perhaps consumers who came there because of an attractive offer end up buying more products that they had not considered.