An Introduction to Price Psychology
I’ve always been fascinated by why people buy things. I’m not talking about when people buy a snack because they’re hungry—I’m talking about when people buy a snack because of how the store, the display, and the packaging were engineered.
As an adolescent, I read an article about how malls were designed to guide people at every turn, pushing them to buy things they wouldn’t have otherwise gotten. I’m a social psychologist. I study things like persuasion, giving to charity, and perception. I’m still just as interested in how easily people can be influenced!
In this 10-day email course, I’m excited to show you one thing that can influence people’s buying behavior: prices.
Obviously, people are more likely to buy a sandwich for $5 than $500, but price psychology isn’t about the price itself—it’s about how the price feels. There are all sorts of things that a salesperson can do to the way a price looks and feels without changing the actual price itself, and study after study has shown how these simple changes affect people’s perceptions and choices.
Price psychology is a fascinating part of consumer behavior, and it affects us almost daily. Consider the surprising pricing trends at Uber, the popular taxi-like service. They noticed that people were more likely to book an Uber car when the price was 2.1x the normal rate than when it was 2.0x the normal rate! Why might that be?
Tomorrow, I’ll start by showing you the oldest trick in the book: ending a price in “.99” instead of “.00” (e.g., $9.99 vs. $10.00). This trick has become common, but does it really work? The point I really want to make tomorrow is that scientific studies reveal the effectiveness of pricing strategies. Only when you run a strong test can you know if something works or not.
Over the next 10 days, we’ll look at surprising pricing tricks like font size, hiding people’s birthdays in prices, and listing prices in various orders.
Now, you might have signed up for this Highbrow course because you’re just interested in psychology and you want to know how something as simple as a price’s appearance can affect your shopping choices. If that’s the case, get ready to explore this fascinating set of studies!
But you might also be interested in using price psychology. If you’re a marketer, this is the kind of research that you should be paying attention to! The science has already been done—now it’s up to you to implement it!
That’s all for now! See you tomorrow, when we start exploring the intriguing world of price psychology.
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