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Simple Pricing Strategies To Improve Sales

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Last year ford managed to earn $7.2 billion, more than any other auto maker company. Ford couldn’t have managed it without a new pricing strategy that helped them to upgrade their vehicles they sell. Thus, smart pricing strategies are required for development of a business and for such a competitive marketplace.

Below stated are some fascinating studies about how companies should cleverly set their prices

  • Price anchoring should be employed

Anchoring is a cognitive bias according which it is a common human tendency to be too heavily dependent on first hand of information that is offered to them. This method is generally used by restaurants where the more expensive items are placed at the fringe of the menu so that other items look cheaper in comparison.Thus this strategy works well with potential customers- by placing premium products near standard products which creates a clear sense of value and this way the customers will think that the less expensive item is bargain against more expensive.

  • Pain points should be reduced

Neuro-economics says that human brain is wired to spend till it hurts. So thus the sales process should be strategized in such a way that the pain points can be reduced during purchase and this increases the post purchase satisfaction and thus increase sales.

  • Prices should never be compared without a reason

Comparing prices can cause unplanned effects in consumer evaluation if there is no reason why the prices are being compared. This results in lost of trust of consumers on marketing message.

  • Similar prices can cost you sales

The solution to this problem is two identical items should not have similar prices; instead they should be priced differently so that customers feel they are different from one another.

  • Weber’s law- it’s secrets

Weber’s law states that noticeable difference between two stimuli is directly proportional to the magnitude of the stimuli. This law is applied to marketing and more emphasized to price increases of products and services.

  • An old classic method should be tried

Price ending with 9 is a classic method used in marketing to increase sales. This method is so effective that companies were able to outsell lower prices with exact same product.

  • Prices should be coded simply

The unpunctuated version goes well with customers as it is easy to be read and does not leave an impact on customers that it is very expensive. For example:1,399.00

The top two prices seemed to be much higher to customers than the bottom one.

  • Power of context should be utilized

Potential customers should be given small signals to justify premium prices rather than assuming that the customers are influenced by the evaluation of price of a product.

  • Time spend vs. saved should be given emphasis

Consumers have more fond memories for the time spent with the product rather than the money they saved. Sometimes reasonable prices are a terrible benefit to a company.

  • Different levels of pricing should be tested

More options should be provided to customers because many times customers want the most expensive item so adding a super premium price would make them choose that options and it also helps in making other prices look better.

Cofounder, Digital Vidya

  • Digital-Marketing

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