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Pricing can be used as a marketing strategy or as a way to increase perceptions of quality. Sometimes it’s baked directly into a brand’s ethos.
It’s so much more than a simple calculation—pricing, especially the practice of psychological pricing, can have a real impact on the purchasing decisions of your customers.
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It's a strategy that uses pricing to influence a customer’s spending or shopping habits to make more or higher value sales.
The goal is to meet a customer’s psychological need for something, whether that’s saving money, investing in the highest quality item, or getting a “good deal.”
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Psychological pricing plays on the fact that consumers rarely know what something should cost. Most often the way we’re able to determine if something is a good deal is by getting it for a lower price than normally listed or by comparing it to similar products in the same category.
Consumers want to know that they’re getting the best of something, whether it’s the best price point, the best quality, or the best value.
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Higher prices give the impression that an item is worth more, even if it’s made by the same manufacturer or the same materials.
This is a popular strategy that businesses use to signal that their items are luxury or designer pieces. Customers see an expensive price tag and assume the items are of the highest quality possible. Even if that is true, it doesn’t mean that the cost reflects what the items are actually worth.
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