At a loss with pricing? Try applying behavioural science
Richard ShottonA good grip on pricing is a sign of a strong brand, and several behavioural studies offer insights into effective pricing strategies.
A good grip on pricing is a sign of a strong brand, and several behavioural studies offer insights into effective pricing strategies.
Consumers’ enjoyment of food is influenced by what they see and know in advance, and while flavour-focused messages improve perceptions, health-based ones actually harm them.
Concrete language is easier to visualise and four times more likely to be remembered than the abstract benefits brands like to highlight in their advertising.
People value something more if they have options to choose from but too much choice hampers decision-making, especially if it’s hard to differentiate.
Conforming to category norms may seem like the safe thing to do but it won’t make people remember your brand.
The ‘labour illusion’ means consumers perceive good products more favourably when they’re aware of the effort put in – but it also makes bad products look worse.
Marketers are fond of declaring consumers don’t trust ads but the data doesn’t support it – only that they don’t like them, which is a different problem.
Marketers spend most of their time encouraging proactive behaviour change, but it’s much more effective to remove the physical and psychological barriers that block it.
Buying habits aren’t formed overnight, but they can be created through systematic application of cues, rewards and repeat behaviour.
Social proof is one of the most robustly researched behavioural biases, and marketers can use it even more effectively when they have a distinctive product.
Brands that are tempted to raise prices during this time of scarcity are likely to be punished by consumers afterwards, as experiments show they don’t tolerate those who take unfair advantage of market power.
Research has found that customers are more open to trying something new soon after a landmark event, opening up an opportunity for brands to get them to switch.
Consumers don’t perceive price in absolute terms but relative to similar products, so if you want to change your pricing model you just have to change your comparison set.
Sometimes a crude, simple message gets the job done better than a carefully crafted masterpiece, yet the latter always get the plaudits. It’s time for that to change.
Increasing satisfaction doesn’t always require costly service improvements – sometimes shifting expectations is equally effective for much less investment.