For example: “Wow, that’s cheap, I must get it”. Or – “Yes, makes sense that it’s highly expensive, it’s a Mercedes Convertible”. Emotion over logic ultimately wins, and pricing will affect it. Different prices will give you (the business) an edge.
However, low prices is not necessarily the best choice. For example, in our industry – buying SEO (search engine optimization) services for the cheapest price can buy you peace of mind for a short while, until you discover that your rankings are tanking from massive spam into bad directories and the spinning of duplicate articles across multiple networks.
There was an interesting study done at the CIT (California Institute of Technology) where 20 people were hooked up to an MRI-brain-scan device, while having them taste some fine wine.
Let’s see what we can learn from this pricing study.
In the test, the participants were informed that they were tasting 5 different Cabernet Sauvignons, each priced differently. But, the truth was different. They were given two twice, one once. A $90.00 wine was served marked once with its real price, but one as a $10.00 wine, while another served twice was marked once as a cheap $5.00 wine, and again marked as a $45.00 wine.
The subject’s brains (the medial orbito-frontal cortex) unanimously showed more pleasure when tasting the wines believed to be highest in price. The pricing influenced, or controlled the relative pleasure experienced.
Interestingly, a later test where all the pricing was removed, showed that a $5.00 wine actually won the taste test!
However, price alone is not enough.
“Price is just one of the elements, but if you served the same wine in better glasses or a grander environment, that would also make people think the very same wine was better.” – Rupert Wollheim, Wine Expert
In your business, don’t rely on pricing alone. In fact, if you are the lowest price, bargain offer – you will not last. Create a better experience, and earn what you are worth.
How can you raise your prices by next week? It will have a dramatic effect on you, your business and your clients.