Competition in the SaaS market is huge, so a simple detail in your pricing can make all the difference and give you an edge over the rest.
When setting prices, the customer's perspective is very important, so you need to understand them and see what psychological factors might make them not make the purchase. With psychological pricing, you can make it easier for them to take that step.
What are psychological prices?
As we have already discussed in the pricing models and pricing strategies posts , price is critical to your business. In this case, we are going into the detail of price, but that can make all the difference.
When we talk about psychological pricing, some people think bahrain phone number library about it because they argue that it is a method to trick the customer into buying. This idea is far from reality.
Psychological pricing is a way to end your price in a more attractive way for customers, removing barriers that make it difficult to buy or create friction in the relationship. Psychological pricing is not put at the front of your price choice, but rather is a way to make your final price more attractive.
Anchoring price
With this pricing method, you set initial prices higher than final prices so that customers perceive high spending. Once you have managed to "anchor" customer spending at that figure, you can bring your product to its real price.
This will make your price seem less high to consumers and make it easier for them to purchase your product.
The best way to understand this practice is by giving a real example. Mailchimp, an e-marketing service provider, has a clear reference to price anchoring in its pricing strategy.
Psychological anchoring prices
You can see that the first price you read is a very high price of $299 for the premium version. This makes the buyer feel a bit put off by the price until they continue reading and see that the recommended version only costs $14.99, which is 95% less than the first option.
This will make customers view the $15 price point in a very positive light, potentially removing that price barrier with this simple action.
