Buying Psychology: A Pricing Strategy Story (Part 2)

Give your eyes a break, listen to the audio version:

 

Remember Joe Bloggs’ success?

His businesses were roaring in PART 1. If you haven’t already, get over there. You don’t want to miss the two awesome pricing strategies that scaled his businesses to new levels.

(There’s nothing worse than joining a story in the middle.)

But, for the rest of us…

…Joe had just employed an ANCHOR pricing strategy, recommended by Einstein Marketer, to propel his Vintage Car business.

And believe us, between PART 1 and PART 2, Joe’s life has got pretty wild.

 

The Danger of Success

pricing strategy dangers

Joe found the right people to run his business, so he could enjoy his free time. Unfortunately, Joe’s bank balance was bigger than his self-control.

He partied 7 nights a week, dated the wrong women and gambled far too much,

One night, he drunk a few too many glasses of champagne in the casino, and put all his money on red at the roulette table.

50/50. Double or quits. Death or glory.

It landed on black.

And within a few weeks, Joe sold his house and was back where he started.

But, Joe’s an ENTREPRENEUR, and that sort of spirit doesn’t quit, no matter the state of his liver.

 

A Changed Man

pricing strategy buying psychology

Like so many who can’t handle the gravy train, Joe wanted his next business to give something back to the community, (as well as making him a tidy profit).

He went back to his roots, and started-up a Sports Coaching Business for Children.

This company would go around schools, talking about the importance of Healthy eating and training the Kids in activities that they can take part in every day.

A real social hero, eh?

Joe was loving his new life, but there was just one little issue…

…hardly any schools were taking advantage of his 3 HOUR healthy eating/living education.

  1. 1 HOUR- Exercise and short lecture –                                                 £80
  2. 3 HOUR- Full exercise program and healthy eating education-   £180

Joe wanted to fully educate the children and ease the logistical pressures of moving from school to school every other hour.

So, cap in hand, he returned to Einstein Marketer.

 

The Decoy

pricing strategy buying psychology decoy

It didn’t take long for Einstein Marketer to see Joe’s problem.

Although offering better value for money, the difference between the two prices was just too extreme.

£180 is cheap for the full service, but it looks enormous besides £80.

So, Einstein Marketer changed his two offers into three (we’ll explain why this works in just a minute):

  1. 1 HOUR- Exercise and short lecture – £80
  2. 2 HOUR- Exercise and lecture- £160
  3. 3 HOUR- Full exercise program and healthy eating education- £180

That’s right, a 2 HOUR option for his customers.

So, why would this improve the percentage of schools buying OFFER 3?

Let’s consider Buyers Psychology again.

First of all, which number looks like the odd one out now? £80? We think so too.

Instead of this appearing super cheap to customers, it actually makes a buyer less receptive. They don’t want to feel like they’re missing out, it makes them FEEL CHEAP and it gives a SUPER COOL aura to OFFER’s 2 and 3.

Now we’ve written off OFFER 1. Let’s take a look at why a prospect would want to buy OFFER 3 and not OFFER 2.

Value, stupid!

We’ve positioned the hours at a price of £80, but a third is only £20.

That’s VALUE.

Nobody’s going to miss out.

 

Reinvention

pricing strategy buying psychology

Joe was on his way back to the top, and this time he had his head screwed on.

His Healthy Eating and Exercise tuition became the in-thing, with huge demand from schools all over the country.

But Joe had a cunning plan to deal with the demand increase, franchise.

He sold a number of areas, (including his own) to entrepreneurs committed to his brand philosophies.

This increased his income, free-time and the business’ value.

But Joe wasn’t satisfied.

He designed and sold merchandise for his Children’s Health Brand.

Let’s take a look at Joe’s pricing strategy-

-Sweatshirts-              £20

-T-shirts-                     £10

-Tracksuit-                   £30

Sales were OK, but they weren’t taking-off like his franchise model.

So, guess whose door he darkened?

You guessed it, ours.

 

The Power of 9

pricing strategy buying psychology

 We sat Joe down, and asked what difference £1 would make to his profit margins.

Joe’s a smart guy. He understood that selling higher quantities at just £1 less, was worth it. So, that’s what we did:

-Sweatshirts-              £19

-T-shirts-                      £9

-Tracksuits-                 £29

The fact is numbers ending in 9, always do well. Some studies have shown it to boost sales by up to 24%, (compared to numbers ending in 0).

But, there’s another way to AMPLIFY the power of 9.

 

Was/Now Prices

buying psychology high ticket

Joe’s prices may have only dropped by £1, but this pricing strategy was eye catching enough to tap into buyers’ VALUE SENSORS.

-Sweatshirts-              WAS-£20         NOW-£19

-T-shirts-                     WAS-£10         NOW-£9

-Tracksuits-                 WAS-£30         NOW-£29

(As an entrepreneur that’s in it for the long term, Joe knows better than to lie to his customers. He would never put up a fake WAS price, and nor should you.)

Joe’s merchandise add-on took off as a result of the Power of 9 strategy, combined with honest WAS/NOW offers.

He decided it was time to take a well-earned holiday, and finally, give somebody else the opportunity to use Einstein Marketer’s services.

 

Moral of the Story 

pricing strategy buying psychology

Joe’s businesses all produced and offered great products, targeted at SPECIFIC MARKETS.

The only thing missing from his strategy were PRICES that tapped into BUYERS’ PSYCHOLOGY.

Over the course of our two-part story, we’ve given you 4 solid pricing strategies, that can either increase sales, or influence buyers to take particular offers.

Einstein Marketer suggests picking out the technique that applies to your product/service and testing it.

You’ll see the results yourself.

So long for now.

And if you’re still interested, Joe lived happily after.

Did you love this blog? Would you like some advice about your pricing strategy? Leave a comment below, or send us a message.

 

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