Pricing tactics are plans or approaches that businesses use to determine the price and strategies of their products or services to maximize profits and achieve long-term financial goals. Some tactics and strategies psychological attract customers to buy the products or services. There are several psychological tactics that eCommerce businesses can use to influence customer perceptions of price and increase conversion rates. Some of the pricing strategies are Cost-based pricing, Competition-based pricing, Value-based pricing, Premium pricing, and Psychological pricing. Some of the psychological tactics are:
Loss aversion pricing tactics
Loss aversion is a psychological principle that refers to the idea that people are more motivated to avoid losses than to seek gains. This principle can be used as a pricing tactic in eCommerce by highlighting potential savings. For e.g, an eCommerce business might offer a product at a discounted price, with the original price listed next to it. This allows the customer to see the savings that they would achieve by making a purchase at a discounted price, which can be a strong motivator.
In addition to highlighting savings, an eCommerce business can also use loss aversion by creating a sense of scarcity or urgency. For example, the business might offer a time-limited promotion or limit the availability of a product in order to encourage customers to make a purchase decision more quickly.
Here is our free code to show the "You Save" near the price which can act as a loss aversion pricing tactic.
Product price Anchoring
Product price anchoring is a pricing tactic that involves presenting customers with an initial price that serves as a reference point for subsequent prices. This initial price is often higher than the final price, which can make the final price seem like a good deal by comparison.
For example, an eCommerce business might offer a product at an initial price of $100. Then, provides a discount that reduces the price to $50. The $50 price point seems like a good deal because it is significantly lower than the initial price of $100. We have seen this kind of tactic on many websites, an example is Udemy.com where most of the time the course cost is $99+ and on some sale events it is sold at around $9.99+.
Price anchoring can be an effective way to influence customer perceptions of value and increase conversion rates.
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Scarcity pricing tactics
The scarcity pricing tactic involves creating a sense of urgency by limiting the availability of a product or offering a time-limited promotion. This can be an effective way to influence customer behavior and increase conversion rates.
For e.g., an eCommerce business might offer a limited-time promotion on a popular product, with the promotion ending in a few days. This can encourage customers to make a purchase decision more quickly, as they fear missing out on the opportunity to get the product at a discounted price. On eBay, you can see "Limited quantity available" for low quantity products and we have seen similar like only "2 available", "last pieces" etc to generate scarcity.
Similarly, an eCommerce business might limit the quantity of a product that is available for sale. This creates a sense of scarcity, as customers know that there is a limited supply of the product and they might not be able to get it if they don't act quickly.
You can test multiple pricing tactics on your eCommerce website as well. You can use Optimize AB testing. Here is one way:
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Social proof pricing tactics
Social proof is a pricing tactic that involves using customer reviews or testimonials to demonstrate popularity or value. This can be an effective way to build trust and credibility with potential customers, which can increase conversion rates.
One example is to show social media followers or email subscribers something like the below:
Display customer reviews on the product page. Testimonials from satisfied customers can be a powerful way to demonstrate the value of a product or service. Here is one example of customer reviews of Upwork works.
Display media mentions
Bundling pricing tactics
Bundling is a way to group or bundle products or services for a single price. This can be an effective way for a company to differentiate its offerings, increase customer loyalty, and potentially increase sales.
There are several types of bundling tactics that companies may use:
- Product bundling: This involves combining multiple products into a single package for a discounted price.
- Service bundling involves combining multiple services into a single package for a discounted price. For example, a company might offer a bundle of cleaning services, including carpet cleaning, window washing, and dusting, for a lower price than if the services were purchased individually.
- Pure bundling: This involves offering a single package that includes all of the products or services a customer needs. For example, a cable company might offer a bundle that includes internet, television, and phone service for a single price.
- Mixed bundling: This involves offering bundled and standalone products or services. For example, a company might offer a bundle of office supplies but allow customers a regular price for other items.
It's important to carefully consider the benefits and drawbacks of using a bundling pricing strategy. Bundling can make it easier for customers to understand the value of a company's offerings and may encourage them to purchase more. Meanwhile, bundling can limit a customer's ability to customize their purchase and may not appeal to those who only want certain products or services.
Conclusion
These pricing strategies are to influence customers' psychological perceptions of value and encourage them to make a purchase decision. It's important to use these tactics ethically and transparently and ensure high quality and value to the customer. In this way, you can set the product's price by using pricing psychological tactics for an eCommerce website. Hope you liked this article, please subscribe to our YouTube Channel for Opencart video tutorials. Finally, you can also find us on Webocreation Twitter and Webocreation Facebook. Please let us know if you have any questions or concerns.
