5 Psychological Aspects of Pricing for Your Online Courses & Products

Have you heard of the expression: “People buy on emotion and justify their decision with logic”? When it comes to price, perception is reality. People buy at one price and not at another because of psychological reasons that they might not even be aware of. However, research that tests hundreds of millions of consumers shows some interesting psychological aspects of pricing that you should be aware of when designing your online training courses and products. How can you utilize these findings? Watch this video to find out:

Here is a summary of the video for your convenience:

  1.  Increase the Perceived Value of the Product with a Higher Price

Often, our first impulse is to lower the price. However, higher prices can sometimes attract MORE buyers. Price creates expectancy. Ladies, would you choose to buy an anti-wrinkle serum for $99 or face lotion for $5? Many of us will think, “Hmm. I am not putting a 5 dollar lotion on my face!” We expect the $ 99 serum to be much more effective than the $5 lotion even if there is no scientific proof to that!

Therefore, instead of lowering the price, try to increase your product’s value by stacking irresistible bonuses.

2. Increase perceived value of your product by choosing the right words.

As in the example above, the word “serum” has a higher value perception than the word “lotion”. So does the word ‘gourmet”. I can sell you the same hamburger that you buy in MacDonald’s for a much higher price if I call it a “gourmet hamburger” as your price expectation would be higher. I often use protein shakes as a part of my active workout routine. When I see a shake in the store for more than 4 bucks,- I feel it is a rip off. However, in the gym there is a cool juice bar, where my friend sells shakes such as Metabolizer, or Wake Up Skinny  for 5+ dollars. I gladly pay for it and even give him a tip.

3. Create the Perception of Savings

Different price points create different perceptions. As with my opening example, you know a usual trick that many products are marked $9.99 instead of $10 because people perceive it to be much better deal. There is a theory that people pay more attention to the digits on the left. Also, a cost  looks minimal if it is compressed to as few numbers as possible e.g. $234. But if there is a promotion or you list your bonuses then  you want to add more zeros. So the customer will feel that he is saving $100.00’s and $1,000.00’s of dollars.

4. Make it easy for your customer to make a decision

People prefer a flat rate, because they don’t like to think too hard. You see it everywhere: with your gym membership, or insurance. I found that creating installments plans works like magic for my customers. It is much easier for the client to commit to, say, a $135 a month than to a $499 at once because people are more sensitive to the size of the repayment rather than the duration.

5. Create an offer the customers cannot refuse.

a. Create discounts

People love feeling that they got a good deal.  Discounts ­ from 10% to 75% off ­ almost always never fail to attract buyers. Of course, the bigger the discount, the better! (Hint: you can create a discount without necessarily lowering your price.)

b. Lead a customer to your desired option:

There is a “trade off effect” when people rationalize making less expensive options by avoiding making the most expensive one. So, it is smart to create a 3-option deal for your customers. For example, you want to sell your course for $550. Now create a higher-end option, say $ 999 and a lower-end option, i.e. $325. Make the middle option an obvious good lead by adding some bonuses to it.

By the way, we go through all these points and much more in my Teach and Prosper Boot Camp that starts February 4, 2013 and last for 7 weeks. In this course I will help you design and develop online products and courses that answer your audience’s needs and create attractive offers to your clients. The seats are limited as I provide a lot of personalized attention to each enrolled customer. So register today and enjoy the early bird registration (which ends at midnight!).  Click here to register and learn more: http://www.teachandprosperbootcamp.com

WHAT TO DO NOW:

In the comments below please share with us how you approach pricing your online courses and products

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If you liked this post you might also enjoy:

3 Reasons why your products do not sell: http://www.wiredatheart.com/2013/01/09/3-reasons-why-your-online-products-and-courses-do-not-sell/

How to build trust online? http://www.wiredatheart.com/2012/10/17/how-to-build-trust-online-in-5-steps/

How to create online content that gets attention: http://www.wiredatheart.com/2011/12/14/how-to-create-online-content-that-gets-attention-using-human-psychology/

 

 

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4 thoughts on “5 Psychological Aspects of Pricing for Your Online Courses & Products

  1. I like the helpful information you provide in your articles.
    I’ll bookmark your weblog and test once more right here frequently. I’m relatively sure I’ll be informed many new stuff right right here! Good luck for the next!

    • Thank you so much for such a kind note. You can subscribe to the blog to receive additional benefits, such as special reports I ONLY share with my subscribers. Have a great day and welcome aboard!

  2. Very interesting. It really is difficult to fit this type of question, especially in a context of economic crisis like we have in Spain. Very enlightening. Thanks for sharing.

    • Thanks, Paz! I know the economic crisis is a tough one everywhere, but I also know that when people REALLy want something, the majority will find the way to pay for it, and you can make it easier for them to make this decision.

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