OnDemand WTP Pricing Research

Decoy Pricing: Secret Strategies Your Competitors Use to Get Customers | Shopify

Everyone’s bought something on a whim because it seemed like a fantastic deal. Make no mistake, the store knows it.

The other day I was in a sporting goods store looking for a running shirt. I found one that I liked and went to the dressing room to try it on. It fit perfectly – success!

It was then that I noticed a red tag advertising two shirts for $19. One shirt was priced as $12.5 so to add a second and only spend $6.50 seemed like an excellent deal. Of course I bought two.

I didn’t need both, but not buying two would have been foolish. Consumers run into these kinds of pricing tricks every day.

But why is it so effective?

You Don’t Always Get What You Pay For
People tend to believe that “you get what you pay for” which over time has been translated in their mind to mean “expensive = good.” Usually, the “expensive = good” stereotype works out great. Typically a higher price reflects top quality.

That’s not always true, of course. Robert B. Cialdini gives a great of example of this in his book “Influence: The Psychology of Persuasion.”

In it, he tells a story of a jewelry shop that managed to clear slow-moving turquoise pieces by accidentally doubling the price of the merchandise.

People are unlikely to know the exact value of things like jewelry so they use the only info they have – the price – as their guide. Since expensive means good, it was a natural choice for customers to make and the products sold out quickly.

Want to know how your competitors do it?

What follows are many proven pricing strategies that you can implement and use in your business.

Bundling for a “Perceived” Better Deal
The earlier story of me buying two running shirts when I only needed and wanted one is a perfect example of bundling – the practice of selling several items for a supposedly bargain price.

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Decoy Pricing: Secret Strategies Your Competitors Use to Get Customers.