Pricing Your Stuff: THE DEEP, DARK SECRET YOU NEVER KNEW
November 1, 2019
In: Money Talk
Isn’t pricing a GROAN? Like, you physically groan when it’s time to “figure out your pricing,” because WHY DOES IT SEEM LIKE THE MOST ARBITRARY THING ON EARTH?
How do I know if it’s right? Is it too high? Too low? Will anyone buy it? Am I selling myself short? Does the price match the value? Do I seem self-important? What if people are like, “bitch crazy.” [?] What if I ~ am ~ crazy? And how am I supposed to price my work in a way that actually feels…legit?
All very good questions, Watson. Emma Watson.
And allllllll questions that my friend Hannah and I discussed the other day in London at a bar. (Aside: can I start every sentence with “the other day in London at a bar?”)
You see, I’m the a-hole who gets people drunk and then interrogates them so I can know ALL THE THINGS. And Hannah just happens to be a real, live, in-the-flesh pricing consultant, which means she works with companies to figure out how to price themselves and how to do so in a way that makes customers want to spend more. (Fun fact: the prices on the wine list should be placed in the order of from MOST expensive to LEAST expensive, rather than the other way around—so the brain anchors to the highest price first and then the rest seem reasonable by comparison…which totally actually produces a big difference in sales. Humans—we’re simple creatures, really!)
So naturally I was like: tell me more, Hannah, tell me MORE.
And so she did—while some other guy made out with his mistress in the dark recesses of The Salisbury in Covent Garden, obviously—and right then and there, we started talking about the importance of—ready for this?—having an “ugly” price.
“An ugly price?” I said. “But don’t you want to make your prices attractive?”
“An ugly price does make your overall pricing more attractive.”
And so it was over a gin and tonic that Hannah and I talked about the importance of always having an ugly price point that sits alongside your main price point. Turns out, if you’ve got just one price point listed, customers don’t have anything to compare it to. However, if you’ve got a slightly less attractive option sitting next to it, it makes your main price point more attractive, simply by manipulating the context.
The research backs this up. I didn’t believe her at first, but then she opened her laptop and showed me the new online course she had produced, and showed me the actual studies that prove that having an ugly price—that is, a price that’s 80 – 90% of the main price, but only 50% of the value—can boost your sales of your main price point dramatically.
Why? Because now your customers have something to compare it to. And now the value of your main price really shines.
For example: If your main product is priced at $199, you should also have another price point at $179—so, close in price—but with only 50% of the value. (So the true value of your main price is highlighted.)
Crazy, right? But so, so useful. I feel like I’m in the CIA.
So THEN we got into the importance of having a ~ third ~ type of price point listed, also because of the contextual effect—but that's a whole other story for another time. I mean, I’d always known that pitching three price points is what netted the most sales overall, but I never knew the nitty gritty psychology of why. Hannah did, though. And my GOD, is she brilliant.
So of course, I demanded that she give me a link to her course that very instant, and boy was I blown away by not only THE SHEER AND INCREDIBLE UTILITY OF HER KNOWLEDGE, but at how professional the course itself was produced. She hired animators, she has gorgeous video, she explains everything in a fun, clear, and concise way. And, I mean, she’s got a British accent, too—what more do you want?
Hannah’s still in her beta phase, but if you want to learn all of her pricing wizardry, the doors are open to her Psycho Pricing course until Monday—and you can get it for a super duper cheap beta level price. [That is absolutely an affiliate link, which means Hannah will give me a commission for telling you about this. Yay for friends with benefits!]
I am so excited!
Let’s take it together, shall we?
In the meantime, I’ll be thinking about how we can incorporate an “ugly” price into all of our offerings. 🙂
P.S. Hope you had a fucking fantastic Halloween! It’s the weekend, and this girl is off to prepare for…drum roll….OUR PRE-ORDER BOOK LAUNCH! Oh yes, it’s coming. And it’s coming to a screen near you. And I have never been happier for anything, ever: except maybe the time my mom left to go to the grocery store and came back with a used Toyota. It was the very first car we ever owned—and I was so relieved that I didn’t have to carry grocery bags on the side of my bike handlebars anymore.
That’s sorta how I feel with Hannah’s pricing course: relief! No more heavy lifting—unless they're sacks of money.