Charm Pricing -- why I don’t recommend it
Many businesses -- maybe yours -- use a pricing tactic that is manipulative... and oftentimes they don’t even know it.
Examples:
$14.95 instead of $15
$47 instead of $50
$999 instead of $1,000
What’s going on here?
The tactic is called “charm pricing” or “psychological pricing”. You encounter it when you go shopping.
Few consumers realize what’s going on:
It makes you think a price is smaller. For example, $947 seems like it’s “under a thousand dollars” instead of $1,000 which can make people think “wow, it’s a thousand dollars!”
The weird price can temporarily short-circuit your rational decision-making process and make you buy without considering your budget.
Simply put, it is manipulation in plain sight.
Is that the way we want to start the relationship with a customer? By tricking them, trying to prevent their mind from considering the real price of our offerings?
Once I realized this, I could no longer do it in good conscience. (Having a clean conscience is vital for running an authentic business!)
As a result, my offerings now have simple prices:
I’m probably giving up on some sales by doing this. But aligning with my conscience and having a more honest relationship with my customers is more important to me. It feels better to the heart!
It’s more empowering to build a business with integrity, knowing that I’m allowing customers to make a thoughtful decision, not needing to manipulate them.
We shouldn’t need to use any psychological tricks to make enough money. We should provide products that our audiences want, at prices that are clear, yet profitable.
Interestingly, our clear and simple pricing might even stand out, and allow others to trust us more quickly, since everyone else seems to be trying to trick them.
I encourage you to revisit your pricing today and see how you might modify it to feel better to you, and cleaner to your clients.
Few consumers realize what’s going on:
It makes you think a price is smaller. For example, $947 seems like it’s “under a thousand dollars” instead of $1,000 which can make people think “wow, it’s a thousand dollars!”
The weird price can temporarily short-circuit your rational decision-making process and make you buy without considering your budget.
Simply put, it is manipulation in plain sight.
Is that the way we want to start the relationship with a customer? By tricking them, trying to prevent their mind from considering the real price of our offerings?
Once I realized this, I could no longer do it in good conscience. (Having a clean conscience is vital for running an authentic business!)
As a result, my offerings now have simple prices:
- $75 instead of $74.95 or $77
- $100 instead of $97 or $99
- $150 instead of $147 or $149
I’m probably giving up on some sales by doing this. But aligning with my conscience and having a more honest relationship with my customers is more important to me. It feels better to the heart!
It’s more empowering to build a business with integrity, knowing that I’m allowing customers to make a thoughtful decision, not needing to manipulate them.
We shouldn’t need to use any psychological tricks to make enough money. We should provide products that our audiences want, at prices that are clear, yet profitable.
Interestingly, our clear and simple pricing might even stand out, and allow others to trust us more quickly, since everyone else seems to be trying to trick them.
I encourage you to revisit your pricing today and see how you might modify it to feel better to you, and cleaner to your clients.