Perception often plays a key role in business owners setting prices for their products and/or services. It defines how your client views the value of what you are offering. Some entrepreneurs will purely use this approach when considering what prices to set. However, relying on this perceived value can come with its own risks. A common error is when the perceived value of your offering is far greater than your client’s acceptance of that perception. Business owners that understand the role psychology plays in pricing strategies come out on top.
The perception of savings: A product that sells for £9.99 does better than a product that sells for £10.00. Customers look more favourably on prices that end with 99p although we are only talking about 1p difference. Also customers tend to focus on the first figure so £9 is cheaper than £10.
The perception of value: This is where business owners bundle their offerings together e.g., buy one, get one free, buy ‘service A’ and get not one but three further bonus items. The client feels that they are getting more for a lesser price.
The perception of discount: Discounts always attract clients, 75% off never fails to attract buyers. People love that they are saving money and getting good value. What price would you put your service offering at if you knew you were going to offer a 75% discount to attract new clients?
The perception of unbundling: This is where you create the option for your clients to make routine payments. By making the cost to customers small it becomes trivial and a no-brainer, even if the end result means they end up paying slightly more.
If you want to get to grips with money and banish those negative views try the following:
- On a piece of paper create two columns; write down everything that you associate negatively with money in one column. In the other, write done the opposite including the opportunity it provides. If it helps work with a business colleague or friend so that you can really challenge your thinking on this.
- Cut the piece of paper into two columns. Destroy the column with all the negative words on it. Read the positive list at least once a week if not more. See how your view on money starts to shift.
- Consider if money was a person what characteristics would you like them to have? Would you like them to be respectful, committed, dependable, fun? Would you like them to pay on time, have funds to buy your services? Imagining money as someone you might do business with helps you define how your relationship with it should be constructed.
- Set an intention every day and write it down. The more positive you become about money the more positive an experience you will have with it.
- If you have negative thoughts, for example, you may feel that you do not deserve to have a thriving business, then change that thought and replace it with a positive one, for example, I deserve to have a thriving business where my clients pay my fees easily and effortlessly.
- Keep a gratitude journal – remembering all the good things that happen keep you in that positive space.
When we understand that money is energy then we can start to focus on directing that energy flow into our lives. Money is not the only thing that makes the world go round but if you want to have an abundance of it coming into your life then it needs to be fairly high on your list of priorities.