Are There Any Downsides or Upsides in Psychological Pricing?
Psychological pricing, a frequently used form of pricing strategy in the world of marketing, likewise any other things in the world, nothing is created completely perfect, some are born with natural upsides and some with downsides, but ultimately, are born with both sides.
What is psychological pricing, really? When a typical person hears the term, the first thing that comes to their mind is odd pricing, which perhaps they didn't even know there was this actual marketing term.
Odd pricing, or odd-even pricing is when firms price something at just below the whole number point such as $9.99, rather than a full $10. You might think... seriously, does that really make a huge difference? Although its real difference is only off by a cent, it appears that the number 9 is significantly lower than 10, therefore consumers believe it has a great discount.
Anyway... let's get to upsides and downsides, beginning with the major disadvantages first.
While not every single consumer will fall for psychological pricing strategies, many of them tend to re-calculate the sums in their receipts after a checkout to prevent any errors and to know what really cost the most compared to the other items.
Having said that, to add up all these oddly priced numbers is literally a pain in the... you know, perhaps this can be termed as calculation complication, which is a quiet frustrating problem to shoppers.
In addition, taking into honest reconsideration, do you really think you, or anyone can be the first person to utilize this strategy in the economy? No, for sure, millions of practical applications exist right now, in almost every single grocery store, shop, supermarket can this pricing tactic be seen.
The takeaway message from this is that you are not alone, and when everyone is using the exactly same strategy, its effectiveness on consumers will gradually degrade. So, crave up some originality.
While the two key downsides are said, the following describes the opposite points which are some of the major upsides in using psychological pricing.
The best thing about this tactic is that setting these kinds of prices work because human beings tend to view daily objects in an emotional way, rather than like a serious strict rational decision-making machine, and I suppose the target of all pricing tactics are human consumers?
There's no need to worry about the possible competition in using this tactic.
What Actually Enpowers Psychological Pricing?
How psychological pricing really turns out to be effective is determined by the concept of perception of value.
A more obvious advantage, which is also the most important of all, is that using psychological pricing, likewise, any other pricing tactics will get us more conversions!
Increase sales and grow customer base, right? Without doubt, the main goal in doing business is to maximize profits after all.
Nonetheless, by utilizing the art of psychological pricing, although it yields a couple of downsides as well as upsides, the conclusion from this is it can help us generate more money and improve one's previous business model.