91: The Psychology of Pricing

Welcome back to our series on money and pricing! Today, we’ll dive into the psychology of pricing—a topic that fascinates me!

Key Takeaways from this episode:

Understanding Pricing Psychology:

Pricing psychology is about presenting your prices in a way that’s most appealing to potential customers, increasing the likelihood of them purchasing your services. For instance, have you ever noticed prices often end in .99 instead of rounding up to a whole number, like $2.00? This is because our brains anchor to the leftmost digit; $1.99 feels much cheaper than $2.00. NOTE: this isn’t about "tricking" customers, but is simply understanding how the human brain perceives prices so you can present your prices in a way that is most psychologically pleasing to a potential customer. (Check out Nick Kolenda's website at Kolenda.io for extensive resources on pricing psychology.)

Payment Timing Matters:

It can be psychologically easier for clients if they don’t pay at the time of service. Think about structuring your payment systems so clients pay upfront or at a different time than their service. By doing this, you can ease the sense of loss associated with paying, allowing clients to focus on the value they are receiving at the time of your service.

Combatting Buyer’s Remorse:

After a client commits financially, it’s vital to reassure them that they made the right decision. This can be as simple as sending a follow-up email filled with valuable information that excites them about the upcoming service. In my nature-based practice, we send a welcome packet shortly after families sign up their child for services. This welcome packet includes essential details about what to expect and introduces their therapist, helping clients perceive value from our upcoming services and feel good about their investment right from the start.

TL;DR:

Check out Kolenda.io for more on marketing and pricing psychology, consider structuring your payment processes to ease the psychological burden on clients, and always aim to reassure and provide value immediately after clients pay for services.

Connect with me on Instagram @lauraparkfig or visit therapyinthegreatoutdoors.com for more resources!