In this episode, we look at pricing and payment tactics.
This episode was inspired by Richard Shotton’s book The Choice Factory – How 25 behavioural biases influence the products we decide to buy, chapter 6, The Pain of Payment.
You can buy his book by following the link below.
1. Use payment terminals – people think about the purchase more when they handle physical money. When people use cards and contactless cards they are less hesitating about the purchase. Also, they underestimate the amount the spend when they don’t handle cash.
2. Use charm pricing – charm prices end in 9, whether that’s a whole number (£49) or ending in pence (£49.99). Studies have shown products ending in 9 outsell any other pricing tactic.
3. Break the cost up over a time period – the annual amount or the whole number might seem overwhelming, so if you break the cost up into a monthly, weekly or daily cost it seems more affordable. An example could be rather than display the price as £1,000 you could display it as £83.33 a month for 12 months.
4. Create stories behind discounts – straight out discounts don’t work as much as discounts with a story behind why you’re discounting. Therefore, tell customers why you’re discounting.
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