How to Influence Perceptions & Boost Your Value

This blog is part of my Pricing Series. I dive into everything from pricing strategies to ethical pricing and more. Be sure to click here to subscribe to my email list so you can be the first to know when the next blog drops each week.

Raise your hand if you’ve ever stared at a price tag and thought, ‘Did they throw darts to pick these numbers?’ 

Or, as a business owner, maybe you’ve played ‘Eeny, meeny, miny, moe’ with your pricing, fingers crossed it doesn’t scare customers away.

We’ve all been there.

What if I told you that there’s a method to the madness?

The truth is, numbers do more than just tally costs– they communicate value. 

Ever wondered why that shirt at $49.99 feels remarkably cheaper than one at $50? It’s not about the penny saved, it’s about the perception created.

Understanding this psychological impact of pricing is crucial, especially in creative businesses where value is often perceived differently.

Pricing with psychology in mind is about understanding how numbers affect customer perception. It’s a mix of logic and emotion, where every price point and even the most subtle changes can alter how customers see the value of what you’re offering in your creative business.

Now, let’s break down how this concept plays a pivotal role in influencing your Ideal Client Avatar’s (ICA’s) consumer behavior.

In this blog, I’ll guide you through the intricate web of pricing psychology. We’ll explore how to set prices strategically and profitably, while ethically tapping into the emotions, beliefs, and subconscious perceptions of your ideal audience. 

What is Psychological Pricing?

The simple answer: psychological pricing is a strategy businesses use to price their offers with a deep understanding of how our minds work.

Emergen Research defines psychological pricing as, “a strategic approach that leverages human psychology and cognitive biases to influence consumer perception and behavior regarding prices. It involves setting prices in a way that resonates with consumers on a subconscious level, making them more likely to make a purchase.”

This kind of pricing intentionally taps into how the human mind works, to align your prices in a way that resonates with consumers below the surface, subtly guiding them towards a purchase.

Here’s a relatable example:

Think about the last time you were low on gas. There were probably two stations in sight – one at $3.99 the other at $4.00 a gallon. 

Which one would you choose?

Your brain sees $3.99 and thinks “bargain” – it’s only a cent less, but that 3 at the front hooks you. That’s a classic example of psychological pricing. 

In this case, it’s how smart pricing gets you to stop and fill up.

How Does Psychological Pricing Influence Consumer Behavior?

Psychological pricing is so much more than just putting a price on something. It affects how customers see and think about what you’re selling. 

This method uses a mix of feelings and common thought patterns to sway buyers’ choices and how they judge the worth of your product. 

It requires you to match the price with what your customers expect and how they see your brand, making sure it feels attainable, reasonable, and just right for them. 

Just like the $3.99 a gallon seems more attractive, psychological pricing ensures your product hits the sweet spot in your customer’s mind.

The Benefits of Psychological Pricing in Your Creative Business

1. Capture the value of your offer. Using pricing tactics grounded in human psychology can help showcase the value and uniqueness of what you create. This helps match the price with what your customers think it’s worth. Your price should show how special and creative your work is, making customers feel it’s a good investment.
   
   
2. Happier customers. When the value aligns with the price and your buyer believes they got a fair deal, you build trust, higher satisfaction, and often repeat customers or referrals. 
   
   
3. Helps you stand out. By pricing your offers in a clever way, you can make sure your creative business stands out in a crowded market.
   
   
4. Encourage quick buys. Creative services and products can often trigger spur-of-the-moment purchases. The right pricing can make this happen even more frequently. With intentional pricing strategies that tap into emotions, you can prompt customers to buy on the spot, boosting your sales.

Now that you understand how businesses use psychology to influence their buyer’s habits and have the potential to benefit your business, let’s explore specific tactics that can subtly but effectively influence your customers.

Psychological Pricing Strategies for Creative Businesses

Before we dig in let’s be clear:

If you don’t do the foundational pricing work first, even the slickest sales tactics might not cut it (and worse yet, could come across as sleazy). You could make the sale, sure, but then risk customers feeling let down or losing trust in you. 

Not okay, right?

So, get confident in your pricing first. Feel that solid ground beneath your feet where you know your price reflects your value. Once you’re there, then it’s the right time to layer in or explore psychological pricing. 

These clever tricks aren’t only about making a sale – they’re about making the right sale – where your customers nod, smile, and think, “This is totally worth it.” 

That’s when you know your pricing is aligned!

With that being said, let’s explore the different ways that creative businesses like yours can leverage the power of psychological pricing to encourage your ideal audience to take action and buy your offer, product, or service!

COO Tip: Struggling with pricing? Scroll to the bottom of this post for 3 of my best blogs on pricing in your creative business. Or, if you’re looking for more support, my ‘Pricing For Creatives Mini-Course’ makes it simple and actionable. Learn clear, effective ways to up your earnings. Ideal for business owners in need of hassle-free, custom pricing solutions. No overwhelm, just results.

Harness The Emotional Pull of Numbers

Numbers speak volumes. In fact, they carry quite a bit of emotional weight. 

• Round numbers, like $50, appeal to our emotions, making us feel good about a purchase. 
  
  
• Precise numbers, say something as specific as $49.83, target our rational side, making us feel like we’re making a smart, calculated decision. 
  
  
• Charm pricing is a classic trick – bump up a price, then nudge it down a bit. $50 becomes $49.99, and suddenly, it’s a deal! Why? Because we read from left to right, and that first digit hooks us.
  
  
• Visual cues, such as displaying a higher crossed-out price next to your selling price, allow you to show savings and amplify them in the customer’s mind.
  
  
• Anchoring is when you set a high ‘anchor’ price to make your actual price seem like a steal. 
  
  
• The Decoy Effect can be used to offer three-tiered pricing options. Watch customers gravitate towards the middle one because it seems like the sensible compromise.

That’s psychology at play in every price tag you see. Now you have some ideas to help you guide your customer’s perception and decision-making.

Ethics in Psychological Pricing

Playing with perceptions is powerful, but with great power comes great responsibility. Ethical pricing isn’t just about fairness, it’s about trust. 

If done irresponsibly, it can be seen as manipulation and may end up backfiring!

I highly recommend you avoid practices like “personalized pricing,” where different customers pay different prices for the same item or service. 

Airlines love to play the personalized pricing game.

You know the drill: the same cramped seat gets slapped with three different price tags depending on when you hit ‘book’. 

And restaurants? They’re no strangers to this either, luring us in with those tempting off-peak hour discounts and promos (think: early bird specials, happy hour specials…even game day specials!).

But, while this might fly for them (no pun intended), letting them squeeze every dime out of thin air, this approach isn’t often right for creative businesses.

Let’s face it, we’re not just selling seats or slinging happy hour specials. In the creative business world, your pricing needs to make sense and stand for something more than just playing the supply-and-demand game.

Not only can this personalized pricing open a can of worms legally, but it also has the potential to taint your integrity as a business owner.

COO Tip: An important exception to personalized pricing is offering “legacy pricing,” where longtime clients are grandfathered into your best rates as a reward for their loyalty. Another time you may personalize pricing as an early bird incentive. This approach reinforces quick action.

My Best Pricing Advice

So, how can you apply all these insights to your pricing strategy effectively?

How much you charge for your services is closely linked to how your customers think and feel about spending money. Your approach to setting prices and your customer’s mindset are deeply connected.

Here’s my best advice as a business coach for creatives: 

1. Before diving into any psychological strategies, let’s get the basics down pat. Start with a solid pricing strategy. Do the groundwork. This will ensure you understand where your offer stands in the market, clarify who your Ideal Customer Avatar (ICA) is, and ensure that the numbers add up for both you and your business. Solid pricing is your foundation. Only then can psychological tactics come into play to make your offer irresistibly appealing to your ideal audience.
   
   
2. Dive in with your eyes wide open. Exploring the different psychological options helps you notice which strategies you do (or do NOT) resonate with. Choose your tactics not just for their strategy but for how they align with your ethics. You need to focus on your values as much as you do on your profits. When you sacrifice one for the other, you’ll likely feel unaligned, and your audience might feel the disconnect too!
   
   
3. Aim for transparency. When you’re honest about numbers, you build trust. Being open about your prices and your value brings power and clarity to what you do.
   
   
4. Be proactive in your pricing. This means planting your feet firmly and confidently in your strategy. Remember, you’ve got this. When you’re clear about the value of the creative work you bring to your industry, the world stands up and takes notice.

So, go out there experiment with these strategies, and make your mark. 

Remember: Your pricing is way more than just a number. It needs to hit your financial targets, make sense in your market, fit within your ideal client’s budget, and genuinely reflect the value you bring. 

And let’s not forget, it’s also about making choices that feel right and fair to both you and your buyers.

Psychological pricing can be effective, but it’s just one small piece of a bigger picture.

Interested in getting YOUR pricing puzzle just right? 

I’m here to help. 

Want to get a better handle on pricing? 

Take a peek at my blogs for some practical insights on setting effective prices. 

• Pricing for Profit: The Ultimate Guide
• Why Pricing in a Vacuum is Dangerous: Strategies to Overcome It
• Navigating The Evolution of Pricing With Confidence

Or, if you’re ready to really get to grips with your pricing strategy, my mini-course, ‘Pricing for Creative Entrepreneurs,’ is here to guide you:

I designed this learning experience to equip you with the know-how and the customizable toolkit you need to set prices that echo your value and keep your creative business thriving. No more second-guessing or undercharging. It’s time to price with confidence and let your business soar.

Together, we’ll ensure your pricing clicks seamlessly with your goals, in a way that’s genuine and doable.

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Don’t forget, this is the third blog of our 4-blog series all about pricing in your creative business. Check out the rest of the series here (and stay tuned for more)!

Pricing Series

• Harnessing Customer Feedback for Strategic Pricing
• Beyond Pricing: Building a Sustainable Business Model

Past Pricing Blogs

• Navigating The Evolution of Pricing With Confidence
• Pricing for Profit
• Why Pricing Your Offers in a Vacuum is Dangerous (and what you can do about it)