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:
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
Upcoming FREE Webinar:
“FROM ZERO TO FANS AND CUSTOMERS IN 6 WEEKS”
January 17, 2013 @12 pm Register here: http://www.anymeeting.com/AccountManager/RegEv.aspx?PIID=E952DD8383493C
January 17, 2013 @ 7pm Register here: http://www.anymeeting.com/AccountManager/RegEv.aspx?PIID=E952DD83864F3F
If you liked this discussion, please subscribe to my blog to receive timely updates and your FREE Attention Grabber:
Like my Facebook page to stay in touch:
Get some up-to-date tweets on psychology, connection, engagement and enjoyment in the online context:
Subscribe to my YouTube Channel:
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/