Prices are much more than just numbers. They have the power to tell a story: a story about your value, your promise and why customers should choose you. But how do you make a price more than just a number? how do you effectively incorporate this into your quotes so that your customers recognize themselves in your story and almost automatically give their approval? in this blog you will discover the psychology behind prices and learn how to apply smart strategies to improve your communication and at the same time increase the success rate of your quotes.
The power of prices
A price is never neutral. A price communicates a message and influences how customers experience your product or service. For you as an entrepreneur or sales professional, it is one of the most powerful tools to convey your value.
Just think about:
Positioning
Prices show what your company stands for. A premium price exudes exclusivity and quality, while a lower price communicates simplicity and accessibility. What do you want your customers to think about your company, product or service?
Value perception
Customers not only judge the price itself, but especially what they get in return. The more clearly you communicate the value, the easier it is to legitimately quote a higher price.
Influencing choices
How you present prices determines how customers weigh options. Smart use of price psychology can subtly influence their choices.
A well-chosen pricing strategy strengthens your brand and helps convince customers. But, to make prices truly effective, you will first have to understand how customers perceive prices.
Psychological principles
The way customers judge prices is anything but rational. All kinds of psychological principles play a role in this. Below you will discover the most important strategies and how to apply them.
- Charm pricing: €9.99 feels cheaper than €10
Prices that end in a 9 have an almost magical effect. People read from left to right, which means that €9.99 is more likely to be associated with 'under 10' than with 10. Simple and effective, especially in retail. In B2B, where larger amounts are involved, the effect is less pronounced. Here you would rather choose roundings that radiate reliability, such as €1,000 or €2,500. - The power of an anchor price
The first amount that customers see acts as a reference point: the so-called anchoring effect. Suppose you offer a premium option for €1,500 and a standard option for €1,000. Customers then experience €1,000 as affordable compared to the higher price. This also works the other way around: show an exclusive option of €2,500 and your premium option suddenly becomes a lot more attractive. - Free: irresistibly attractive
The word free immediately triggers a reaction in our brain. Something free feels like an opportunity that you should not miss, even if its financial value is low. Examples: Free implementation when purchasing a subscription or When purchasing 10 items, you receive 1 for free. By making smart use of this psychological trigger, you can in some cases give your offer that extra push. - Bundling or specifying
By bundling products or services, you make it easier for customers to understand your offer. A total price feels clearer than individual amounts. At the same time, specifying can actually inspire more trust, because customers see exactly what they are paying for. How do you make the right choice? Bundling often works better for customers who decide quickly and value clarity. Are your customers price-conscious or used to comparing quotes in detail? Specifying gives them insight and trust. Can't choose? Combine both: give a total price and add an appendix with specifications. - Price and context
Prices are always assessed within a certain context. A cup of coffee of €4 feels normal on a cozy terrace, but too expensive in a company restaurant. In quotes, you can create this context by making comparisons or emphasizing your added value. For example: you offer a marketing package for €3,000 per month. Position this by stating that a full-time marketer costs at least €4,000 per month, excluding additional costs. With this comparison, you show that your service is not only valuable, but also cost-saving.
Customers don’t care about your policies. They care about their problems. Solve their problems, and they’ll pay your price. Ron kaufmann
Present pricing convincingly
A quote is often the first time customers see your price. This makes the quote a crucial document. Here are some practical do’s and don’ts.
Do’s
- Offer options. Offer multiple tiers, such as basic, standard, and premium. This gives customers freedom of choice and increases the likelihood that they will at least choose the middle option.
- Introduce subscription models. By offering monthly payments instead of a one-time high fee, you lower the entry threshold and improve customer loyalty.
- Emphasize value. Customers increasingly choose less based on price alone. Explain what makes your solution unique and how it fits their needs.
- Make your quote clear. Transparency builds trust and makes the decision-making process easier.
- Tell a story. Put your price in the context of your customer’s challenges and goals. Make it clear what you are helping them achieve.
Don’ts
- Don’t overload by providing too much information. Present only what is essential and add extra details in an attachment.
- Be careful with discounts. Discounts can undermine your value. Instead, focus on communicating your added value.
- Don’t let the follow-up slide. Always schedule a time to discuss your quote, answer questions, and discuss next steps.
Conclusion
A price is never just a number. It is a powerful tool that you can use to convey your value and promise. Whether you choose charm pricing, an anchor price, or a transparent quote: tell a story that convinces customers of your added value. Apply the principles and your quote will transform from a few numbers to a convincing story.
