I spent a lot of money on a product this week – but I was happy to shell it out, because I believed I was getting something of high quality and could see how it would have a positive impact on my life.
It’s true that what counts as expensive is relative to our needs and priorities, but prices can definitely be a stumbling block (I sat on my decision for weeks). So when it comes to selling products online, it can be good practice to not only make sure that your customers can see why your product is perfect for them, but to also minimize their perception of the cost.
Thankfully there are buckets of research which exist on how to make prices seem lower – and this article will outline four of the psychological tricks you can use to make the numbers feel more manageable.
Let’s use the example of two products, one priced at $4.99, and one reduced from $10 to $4.99. Both products cost the same, but the second, the one with the reduced cost, feels intrinsically better and more affordable. This is because human brains associate price movements with continued motion: we’re drawn to things on the rise or on the fall because we expect them to keep moving that way.
It’s the same reason an employee who is making great strides forward in their career might receive more attention than a higher leveled employee who has held the same position for years – we’re drawn to movement, and believe (evidence or not) that things will continue on the trend that they’re on.
When reflecting on prices which have been reduced or slashed, we therefore believe them to have been much lower than they were, as we focus on the downward trend instead of the actual price.
When I was a pre-teen I learned the hard way that bigger isn’t always better – I was invited to a Christmas fair and intuitively grabbed the biggest present in Santa’s sack. My friends were a little wiser, and went for the tiniest packages, and where they ended up with beautiful earrings, I ended up with oversized cartoon cork stamps.
Many of us mistakenly believe that size is associated with power and importance: research shows managers are slightly taller on average than other employees (showing that even hiring decisions are influenced) and most of us are always on the hunt for bigger and better houses, opportunities, and meals.
But when it comes to labeling products, we don’t want customers to think prices are hefty or important. Research shows that the same price in a smaller font than usual is perceived as more affordable by customers; proving that when it comes to making sales, smaller is better.
Humans love tying together different concepts; we’ve already touched on big things being paired with power and significance, but marketers use all kind of tricks to make us assume and connect things. For instance, the word natural makes us think a product is healthy, even when that’s not the case.
In the same way, you can use strategic word choices to make your prices seem lower than they are. For instance, researchers who promoted a pair of in-line skates as having ‘low friction' found that customers perceived them as being more affordable than ‘high performance' skates, because people unconsciously tied the word ‘low’ to the price.
If you’re trying to close a sale, using these psychological tricks could help customers take the leap – after all, if the product is good and we feel the price is right, we’re more likely to buy.
- Lena Klein