We have an exciting new mini-series of video blogs coming your way! We have crafted this series of video blogs to give you a break from all the reading you do, and most importantly, give you some hot selling tips that will help to supercharge your business.
Check out the fourth in the series here and remember to keep an eye out on the blog each week for the next instalment!
If you want a written version of the above video-blog... or just can't understand Alice's strange accent, check out the transcript below:
I’m back with another selling tip to help you boost your online sales. Today I want to talk about pricing psychology.
Did you know that you can increase your sales by increasing your prices?
If you do it the right way, you can make more sales and make bigger profits on every sale.
I know this might sound a little crazy, but this theory is backed by a lot of well known marketers and consumer behavior theorists.
One of them is Robert Cialdini, author of The Psychology of Persuasion and in his book, he talks about a women who owned a jewelry store who tried time and time again to sell her jewelry, in her brick and mortar store.
She was having trouble making sales, so she tried marking down her jewelry items by 20%, and nothing changed, so she tried marking prices down by 30% but nothing changed – she still wasn’t making a lot of sales, so the day before she was heading out of town, she left a note for her assistant to mark all the jewelry down by 50% - at this stage, she just wanted to clear out some stock and get some cash flowing through her business.
So the store owner left to go away on her holiday. But, her assistant misread her note and actually increased all the jewelry by 50% instead of marking it down by 50%.
But between the time her assistant marked up the prices and when the store owner got home from her trip, something unexpected happened and the store made more sales than it ever had!
The store owner came home to jewelry cabinets that were virtually empty!
Going back to the book, the author talks about how when we are buying something that we don’t know a lot about, we use our instincts or our common beliefs to help us make the right decision. And a very strong instinct or common belief that we all have is that a high price equals a high quality item.
Anyway, I’m not trying to say that you should go out and increase your prices by 50% - especially if you sell on eBay where price is everything to most buyers – but I encourage you to think hard about how to price your items.
An important piece of advice that I would like to share with you about pricing psychology is about the theory about the magic number 7.
You might not have even noticed at the time, but when you bought your SaleHoo membership, you would have paid $67 for it. Not $65 and not $69. So why this price? And why end with $7?
Well, there is a strong theory which is backed by hard evidence that prices that end with a 7 are more appealing to buyers and can dramatically increase your sales, particularly in online sales.
It’s a strange theory and you are probably wondering how it works, and really, it’s pretty basic.
The rationale behind it is that a long time ago, it was better to end with 9 instead of 0.
Why? What looks better, $29 or $30? Psychologically, $29 looks a LOT better, and when tested, using a price that ended in 9, rather than rounding it up to 0 increased sales dramatically.
However, people soon become immune to this "9" tactic, and it lost it's power. So 7 became the "new 9", and because of it's novelty and because of the fact that the brain can’t quite process a number 7 as quickly as say 5 or 9, it tricks the brain and now this pricing strategy is used widely all over the web.
So maybe you could apply this selling tactics and see how it goes, I would love to hear your results!
If you want to hear more online selling tactics that can dramatically help you increase your online sales, check out my video training course, Online Selling Tactics which shows you proven formulas for boosting your business.
Thanks for watching. See you soon!"