The Psychology of Pricing

We can also assume that probably 99% of merchants would say that price is the most critical factor when it comes to closing the sale (there is always 1% of weirdos, don't ask).

If only the consumer did not want to get the lowest price and the seller the highest price possible, it would be a match made in heaven ...

And if I told you that's still the case?

The logic is quite simple: as a salesman, the goal is to meet the needs of the consumer. Regardless of the other factors, if I offer an igneous rock to a customer who wants to repaint his balcony, no matter how free, there will be no transaction. We will, therefore, assume that the services and/or products that you offer to meet these.

Now, we know that in 70% of the cases the primary factor will be the price and only the price. That being said, look at where many store owners put their efforts: new logos, social media posts, top-notch influencers ... these are all valuable assets, but all this should complement a sound pricing strategy.

The pricing strategy is the foundation. It's not as pleasant as deciding what color we want to paint the walls, nor as glamorous as determining which wood flooring essence will be used for the guest room, but infinitely more important.

How to do it? Here are three techniques that have worked since the dawn of time:

1. Make your offer difficult to compare
2. Always give your client the impression that he got the best deal possible
3. Gamification

Make your offer difficult to compare

Since we can now compare the prices of almost any product in just a few clicks, I always suggest to our customers to offer unique products. Whether by creating a private label, a custom bundle or providing a regular service with a twist, you must make sure to avoid situations of pure and perfect competition **. It only benefits the customer.

Give the impression of offering the maximum

A customer with the impression of getting the maximum while paying the minimum (bonus points if it is a deal that seems exclusive and/or limited time) is a customer who is much more likely to pull the trigger.

I'm not sure that a set of suitcases has already been more than 70% off, but I get caught every single time saying to myself “wow, what a bargain! “... I wouldn't dare to imagine how giddy I'd get if I got to negotiate the price down even more!

Gamification

Gamification is the application of the principles behind games (challenges, rewards, luck ...) in “non-fun” contexts, like eCommerce for example.

The reason why gamification works is simple: human psychology makes us all, to varying degrees, prone to seeking rewards and recognition. Quickly.

A Facebook like, a bonus, a medal... name it.

If, in addition, we are under the impression that we have worked for that reward, it's even better!

Turnkey solution

With this in mind, we at Molsoft have developed the ultimate solution for all Shopify platform users: the Bargainator.

The Bargainator is a virtual assistant-negotiator that allows your customers to negotiate in real time a discount on pre-selected items.

Curious to see him in action? Have a go at him on our test store!

* http://kibocommerce.com/blog/2017-consumer-trends-new-research/

** https://en.wikipedia.org/wiki/Perfect_competition