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Notable! Pricing and Psychology

Discussion in 'General Entrepreneur Discussion' started by nkolenda, May 22, 2015.

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  1. Harti
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    Harti Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    Which price points of these would you recommend and why?

    Stack 1:
    49.90
    49.95
    49.97
    49.99

    Stack 2:
    39.90
    39.95
    39.97
    39.99

    Stack 3:
    29.90
    29.95
    29.97
    29.99

    Stack 4:
    19.90
    19.95
    19.97
    19.99
     
    Last edited: Jun 10, 2015
  2. nkolenda
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    nkolenda Bronze Contributor

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    I like that question (because I would like to know the best answer myself).

    Here's my guess. For any price with cents, both .99 and .95 will be better than .97 and .90. Since .99 and .95 are more common, people might be less likely to question or second guess the price. If you were to price something at $29.97, for example, it's pretty unusual. People might wonder, "why wouldn't they use the normal .99 and .95 ending?" That second guessing might cause them to second guess their purchase (or become suspicious about the product). I don't have any research or data to support that claim, so it's just my "two cents."

    With that being said, I don't think it's harmful to see base prices ending in 7 (e.g., $97, $197). You tend to see those prices with online content. I don't have anything against them. Although you could argue that the "7" increases the syllabic length of the price, I don't think it would play a large role. I think that effect comes more into play when you remove the comma from prices (e.g., $1,950 vs. $1950 -> "one thousand nine hundred fifty" vs. "nineteen fifty").
     
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  3. Kevin90
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    Kevin90 Contributor Read The Millionaire Fastlane Speedway Pass

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    Nick,

    Thanks for the AMA and sharing your knowledge.

    Do you have any tips on how to go about marketing/pitching/purseuding a service based business? I have the urge to try a social media marketing service to companies that don't have any or a strong social media presence. My biggest concern is that these small businesses do not see the value in social and can't fathom spending $xxx each month for the service. Do you have any psychology hacks that would allow them to see the value I can provide for them and their business?
     
  4. nkolenda
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    nkolenda Bronze Contributor

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    Based on my experience, it might be a tough pitch. A lot of small businesses have trouble seeing the value in social media.

    But you should be able to improve the pitch by giving them custom-tailored value. For example:
    • Offer them real example posts that they could use
    • Analyze their current social sharing data and explain those results to them
    • Give them a proposed strategy based on their business and current presence
    If you give them social media value for free, you'll (a) demonstrate your expertise in that area, and (b) trigger a need to reciprocate.

    Some people scoff at cold outreach campaigns. But they can be effective if they're done properly. I think one of the most important factors for outreach is creating a systematic process to compile that custom value (e.g., offering the same types of examples, grabbing the same type of data, etc.). For a successful campaign, you need a good balance of perceived customization and efficiency.
     
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  5. AllenCrawley
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    AllenCrawley Legendary Contributor Staff Member Read The Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    What an incredible thread by @nkolenda. Deserves a bump.
     
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  6. AntEmpire
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    AntEmpire Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    The discovery of this thread came at a perfect time. This afternoon at my slowlane job I was agonizing over how to price my items. I was considering everything from materials, time worked, shipping, fees, and competitor prices. Sometimes I arrived at a number that felt too high or not high enough. But after reading the article on page 1, it was a sense of relief to know there is a method to the madness. While I still have a ways to go to nail a price, I think this article will help get me there sooner than if I was doing it completely on my own.

    Many thanks, Nick!
     
  7. tiagosoares17.22
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    tiagosoares17.22 Contributor Read The Millionaire Fastlane

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    @nkolenda As a fan of human behaviour and persuasion, I found out your book last year and I have to say it's very good.

    Thank you for coming here and share some of your knowledge with us.