How we change what others think, feel, believe and do

The Psychology of Price

Disciplines > Marketing > Pricing > The Psychology of Price

How you present the price of a product can significantly affect how people perceive it and hence how likely they are to buy. Here are a number of important points about the psychology of price that will help you decide on your approach to pricing.

• The 99 Effect: Use just under a price boundary.
• The 95 Effect: Not as annoying as the 99 effect.
• The Brand Effect: We value what we trust and admire.
• The Change Effect: Getting change can seem good.
• The Coinage Effect: More coins (or notes) seems more expensive.
• The Comma Effect: Commas make prices seem higher.
• Contrastive Purchase: Customers choose by comparison.
• The Credit Card Effect: Seems less than cash.
• Discounting: How to charge less but not lose out.
• Distance Effects: Proximity of price to product affects association.
• Easy-Pay Pricing: Make it easy to find and hand over the money.
• First Digit Anchoring: Left digit is basis for contrast.
• Font Effects: Bigger, bolder grabs attention.
• Free: The ultimate motivator.
• Nearby Words: That suggest good value.
• No Currency Symbol: Don't show dollar sign.
• Number Complexity: Confusion can put people off or move their thinking off price.
• The Odd Number Effect: Odd numbers are arousing.
• Pay by Instalments: Looks cheaper than total price.
• Preferred Number Pricing: Use numbers people like.
• Previous Price: Show previous price as well as current price.
• The Price Anchoring Effect: First time counts.
• Price Boundaries: We understand by edges.
• The Price Length Effect: Longer numbers seem more.
• The Price-Quality Heuristic: We think price indicates quality.
• Price Rounding Effect: We round prices to boundaries.
• Pricing Add-Ons: Extra Costs: Include or exclude tax, shipping, handling?
• Rising Strike-Out: Cross out from bottom left to top right.
• Round Numbers: Use easy numbers for emotional purchase.
• Smaller Font: Smaller sale price font actually sells more.
• The Sound Duration Effect: Longer sounds seem more.
• Time and Pricing: Time is money and vice versa.
• Unique Number Pricing: Use an unusual price.
• The Value of Context: Where you buy affects price.
• The Veblen Effect: Buying expensive goods to impress others.
• Weber's Law: Sensitivity is proportionate to price.

See also

Pricing Strategy