Psychological pricing: Secret buying triggers that work
Closing the sale. Even the term sounds manipulative. As you know, no one wants to be sold.
This turns a decision into a transaction, removing the relational aspect. When you understand how people buy, then you can structure an engagement process that leads with value.
Value-based pricing includes several psychological pricing strategies. When applied correctly, they increase the odds of a new client investing in your services.
Reduce your options
Information overload causes your brain to feel paralyzed. People rarely make good decisions under pressure. It’s why people tolerate less than ideal circumstances for so long.
More is not always better. Although people claim they want a wide variety of options, research proves that’s not true. Our human brains don’t like complexity. Too much leads to overwhelm.
The decision to hire you stirs up internal tension. As a result, your potential clients will rely on various decision-making shortcuts. As a trusted advisor, you want to help them make a decision that’s in their best interest.
The compromise effect
There’s a concept called the compromise effect. If you offer three options, the middle item gets picked most frequently. The left or right options feel more risky than the center option.
Many bookkeepers now offer packages, where they bundle various services together. Research shows that three options work best.
There’s an added benefit to offering packages. They separate your fees from time.
List all the services you offer. Then, identify the most popular ones. Consider the outcome you deliver. Bundle together the services that support that outcome. Finally, place your most popular package as the middle choice.
Consider the attraction effect as you price your packages. Strategically price the middle package closer to the larger package. That’s because most people choose the center option.
Next time you go to Starbucks, study their menu. They’ve mastered this pricing strategy. The majority of customers either select the middle or large option.
Let’s say the latte at Starbucks is priced as follows:
- Tall: $2
- Grande: $2.66
- Venti: $2.95
Here’s the dilemma that their coffee lovers face: either they limit the amount of coffee they get or they shell out more money for the size they want. Starbucks realizes their loyal customers will happily spend more than reduce the amount of coffee in their cup.
Some parts of the decision-making process are subconscious. Visual information plays an important role in psychological pricing.
Consider the dollar sign. We associate that symbol with loss, not gain. Because of that Starbucks, along with some fine dining restaurants, keep the dollar sign off their menu. Although it may seem insignificant, customers spend more when the dollar sign isn’t present.
This one’s juicy. It’s why I recommend bookkeepers remove all their pricing from their website, including the “starting at” rates. Our brain naturally takes shortcuts.
Basically, our mind connects with the first number that our eyes land on. As a result, that number now becomes a frame of reference, or anchor, for everything you offer.
Now, let’s apply this to your packages. Identify the specific package you want a client to opt into. Go ahead and place that one next to your highest priced service. This simple placement strategy increases the perceived value.
Lead with high value
Anyone can comb the internet for all sorts of bookkeeping information. Sharing content, whether on your website or social media, allows a potential client to experience what you offer before they contact you.
Consider all the tasting samples at Costco. How frequently do you impulsively purchase an item after tasting the sample? Sampling would quickly be put to a stop if they lost money giving away free tastes.
Freely share your best information. Potential clients get a sense of who you are and your style. Leading with great information positively sways the decision to work with you.
Artfully weave in any innovative features that your service offers. As you educate them about what it’s like to work with you, vividly paint the picture about the benefits they’ll receive.
Reinforce those outcomes with success stories and case studies. Sprinkle in testimonials and reviews on your page to raise your credibility.
Here’s where it’s okay to brag: share any recommendations or awards you’ve received. And, post about the various interviews, podcasts, or publications that featured you. These noteworthy items belong on your website.
Psychological pricing insights
Buying is an emotional decision that is justified with logic. Since your work involves their money, trust has to be established. They need to believe that you’ll follow through with your promise before they sign a contract.
Psychological pricing eases the decision for new clients. Packages simplify the choice. Rather than wonder if they want to work with you, they now decide how to work with you. This pricing strategy increases your earning potential.