Your price points and structures may be impacting purchase decisions more than you might think. If you’re struggling to gain customers and, more importantly, keep them — read this!

Of course, your level of service, the quality of experience you offer and many other emotion-driven factors come into play…

But pricing has a massive psychological impact.

Ignore this critical aspect of business at your peril.

Pricing affects immediate AND longer-term opinions formed around your brand. It changes how customers feel — and ultimately has the power to equal business success or failure.

Below you will find some easy yet powerful tactics to price your products and services the right way.

Use these 7 clever pricing tweaks ASAP to keep your customers coming back for more.

Tweak #1: Buy Now, Pay Later

This pricing tweak relates to financial consequence.

Namely: It eradicates it! At least for a while… and this is enough for customers to feel like they have made a perfectly justifiable purchase decision.

Remove this friction of money immediately leaving their account and you will likely attract many more ‘buyers’ who stay.

There’s evidence of this tactic everywhere. And these guys seem quite intent on getting the message across…

Did somebody say buy now, pay later?!

From gum drops to many other top consumer brands — it’s a pricing technique that works wonders in earning the trust of your customers, paving the way to repeat custom.

Think about it: You are effectively relying on customers to pay at a later date (without saying it that way), even though they are actively free to use your product or service right now!

This ‘exchange of trust’ psychology often means great reward in the form of retaining their loyalty.

Tweak #2: Payment Frequency

Which option looks more attractive — to you?

Option #1: $10 per month

or

Option #2: $99 per year (Save $21!)

Here’s a real-world example where it’s quick to select a desired payment plan:

In the context of certain products and services, two primary factors will likely influence your decision between choices.

Frequency of consumption

and

Perceived value of purchase

What does this mean?

Your trust and perception of the brand in question — including level of service received — will affect your inclination to pay annually.

In addition: The length of time you intend to use the products or service, and how often you plan to use them.

With this in mind, test the above payment frequency tweak (with discounts) and begin to offer your customers the choice of paying in lump sums.

There is also a certain technique you should always apply in harmony:

Tweak #3: Increase Consumption

The possible advantage of annual payment plans?

Customers feel more loyal because they have been with you for so long.

And the possible disadvantage?

Customers don’t use your products or service as much as intended — so when it comes to renewal — the lump sum seems silly to pay.

How do you circumvent this negative response?

Encourage your customers to use your products or service — all the time.

Frequency of health club visits. Source: John Gourville and Dilip Soman, Pricing and the Psychology of Consumption, Harvard Business Review, September 2002.

How?

Always be first in mind:

• Send regular emails, push notifications and texts
• Publish frequent, educational blog content
• Constantly create material to help customers use your product or service in many ways
• Acquire customers’ affinity through storytelling
• Consistently innovate with fresh products and services (+ communicate the news)
• Provide freebies and exclusive offers for devoted customers
• Be insanely active and responsive on social media

and

• Actually use words like ‘daily’ and ‘regular use’ next to your price tags!

Experiment with pricing options to discover what works for your unique offering and customers. Based on the gym research above, monthly payments dramatically increased consumption…

However, annual payments may work better for your particular industry.

Whatever you find works best — just ensure you always promote frequent use of your product or service! This is key to retention.

Tweak #4: Price Anchoring

This particular pricing tweak could be considered to be one of the most powerful.

And it’s very easy to implement.

If you’re displaying standalone products, services and their prices without a second thought… you’re missing a trick.

Let’s say you’re shopping for a sparkly diamond ring, without any extras. Which pricing display option looks more attractive — to you?

Option #1:

Sparkly Diamond Ring: $2,999

or

Option #2:

Sparkly Diamond Ring: $2,999
Ultra-Rare Sapphire + Diamond Ring: $11,500

 

The most expensive (and sometimes deliberately unrealistic) option makes the cheaper price and/or product seem like a bargain buy.

 

When the $2,999 price tag is displayed alone, it actually gives the impression of being more expensive.

You will likely have seen this technique applied on SaaS websites:

 

Association of numbers in the same environment influences cognitive bias.

Keep your customers buying again and again with the use of such effective price anchoring (and environmental influence) on all renewal and product pages. Even within emails and printed material! 

 

BONUS TIP #1 Using 3 options is proven to be the sweet spot when serving price anchors.

So: Compare 3 prices, or display 3 products side by side…

 

Let’s see some of the finest, somewhat ‘old-school’ pricing techniques that still hold the WOW factor when it comes to persuasive pricing techniques:

Choosing a price with fewer syllables:

Why is it so good?

It removes cognitive strain from your visitors’ minds and makes the information easier to digest.

Using a descriptive product name:

Why is it so good?

It simplifies the understanding of your product. Moreover, it’s good for your SEO — which is even cooler!

NOT removing absent features:

Why is it so good?

It’s all about FOMO (fear of missing out). Showing your visitors the features they will not receive with a lower pricing plan will make them more likely to consider higher pricing plans.

Tweak #5: The Power Of 9

Notice the prices in nearly all the screenshot examples in this guide..?

They end in $.99.

It’s definitely not an accident or coincidence. Seriously, just check all the examples again…

When they don’t end in $.99, they mostly end in a round ‘9’ dollar figure!

And here’s the best part: It’s been proven that the number 9 can sell more products even when the price is higher than items that don’t use the number 9 in their prices!

The same item in the study was priced at $34, $39 and $44.

The product listed at $39 sold the most, even though it wasn’t the cheapest.

Tweak #6: Time-Limited Deals

Instead of being reactive, why not be proactive when it comes to retention and pricing?

You can do this by communicating time-limited offers.

This example is particularly clever because it also entices customers to continue spending with additional vouchers (offered on purchase).

You can (and should) always go one step further, providing greater discounts to existing customers. They have already bought from you once or more — please reward them better than anybody else!

It’s a rich form of gratitude…and gratitude pays.

Customers will show their appreciation when you appropriately acknowledge their brand loyalty.

The time-limited pricing tactic also encourages swift action — and the more customers buy, the greater the likelihood of them buying again.

Tweak #7: Discount Bundles

Bundles are hugely popular in many industries. Think games consoles, broadband packages and car insurance…

By offering multiple products or services together at a lower price, customers perceive this as a higher-value purchase.

When it comes to renewals or upselling, there probably isn’t a more superior method than discount bundling. It’s a huge opportunity to attract existing customers to new offerings, and potentially gain further business from them in future…

If they enjoy the products or services within your initial bundle, they may buy more or renew the items (at full price) later on.

Furthermore: Bundles can feel like a big Christmas present, no matter the time of year! This must have an added impact on emotion and loyalty.

Nintendo sold the most products when a bundle was offered (a console and game packaged together), although there was also an option to buy each standalone piece.

Another example:

Many insurers selling two products as a bundle have witnessed their customer retention rates increase. Specifically — 91% retention rate among those who bundle, compared to 67% among those who don’t.

Key takeaway: Bundle discounts immensely increase the value of individual transactions.

Conclusion

Tweak #1: Buy Now, Pay Later
Tweak #2: Payment Frequency
Tweak #3: Increase Consumption
Tweak #4: Price Anchoring
Tweak #5: The Power Of 9
Tweak #6: Time-Limited Deals
Tweak #7: Discount Bundles

Pricing Psychology: 7 Clever Tweaks To Make Customers Buy Again

PS. And don’t forget to always test. Pricing is too critical for it to be unoptimized. Don’t be afraid that some visitors will see lower/higher prices than the others. Almost nobody will notice, and even fewer will complain. If this happens, just explain what is happening and offer to return the difference.