So here’s the thing: We got a bit carried away writing today’s Spotlight issue. But for a good reason—or a good topic, rather.
Today’s about a topic that isn’t talked about enough among ecommerce selling communities (at least according to ChatGPT): pricing strategies, specifically psychological pricing. From the basics to the tried and tested tricks, we’ve compressed everything into one issue to make the info more chewable for you.
- Psychological pricing 🧠
- Pros and cons of psychological pricing ⚖️
- Discount pricing 🏷️
BIG IDEA
Pricing strategies are much more complicated than slapping a number on a product. The end goal of these strategies is to make your customers feel like they’re scoring a major bargain.
Enter psychological pricing—where every cent and sale sign is carefully calculated to influence buyers’ next purchase.
🧠 So, what's psychological pricing?
According to Shopify, psychological pricing is all about making prices look more attractive to consumers. These tactics tap into how customers feel about spending, nudging them toward that “Add to Cart” button.
Think of pricing an item at $9.99 instead of $10. Buyers zero in on that 9, making the product seem cheaper than it really is. Or those bundle deals that convince you to buy more because it "saves" more money.
🪄 And the best thing about psychological pricing? You can easily tweak prices to see what works best! If you haven’t tried it yet, here are 6 proven psychological pricing strategies you can implement this year:
- Charm pricing & odd-even pricing. Drop that price from $4 to $3.99, and suddenly it feels a lot cheaper. Odd numbers, especially 9, are quite persuasive.
- Slashing the manufacturer's suggested retail price (MSRP). Showing the original price crossed out next to the sale price makes customers feel like they're getting a steal.
- Artificial time limits. “One day only!” or “Sale ends in 2 hours!” creates a sense of urgency that pushes customers to buy before it’s too late (even if the sale magically reappears the next day 👀).
- Innumeracy. BOGO deals (Buy One, Get One) often outsell a straight 50% off. Even though the math is the same, one just feels like a better deal.
- Flat-rate bias. An all-inclusive deal feels much better than piecing together separate expenses. Flat rates give peace of mind, even when they might cost more.
- Bundle pricing. Bundles make consumers feel they’re getting more bang for their buck. Also, it simplifies their decision-making process, making them more confident and satisfied with their purchases.
🤯 Pricing isn’t just math—it’s psychology
Mastering psychological pricing can give you a serious edge. From charm pricing to bundle deals, these strategies directly influence how customers shop and how much they're willing to spend.
Next time you put that $9.99 tag, you’ll know exactly what you're doing.
TRENDING
How to create a pricing strategy that builds customer trust in 2025
In a nutshell, psychological pricing appeals to consumers’ desire to get more value for their money. And while it does work wonders in capturing purchases, it also comes with its own set of challenges.
Before you jump on the psychological pricing wagon, here’s Indeed’s rundown of the pros and cons of psychological pricing to help you decide if this strategy fits your business:
🟢 Green lights
- Simplifies decision-making. Shoppers face endless choices; eye-catching prices help them make quicker decisions.
- Increases ROI. Bundled deals and slight price drops can tempt customers to buy more than planned.
- Categorizes products. Pricing can subtly signal product tiers. Think ".99" for bargains and whole numbers for premium goods.
- Wins over online shoppers. A $199 product beats out a $200 one in search filters—it’s that easy! 💰
- Provides valuable insights. Trying out different pricing tricks can reveal what makes your customers tick.
🔴 Red lights
- Depends on demand. Some tactics only work if there’s enough demand. Without it, even the best price won’t move products.
- Risks loss of trust. Customers might catch on to pricing tricks and feel misled. Transparency is key to keeping trust intact.
- Sets high expectations. Overuse of discounts can backfire. If customers get used to sales, they might never pay full price again.
- Delivers inconsistent results. Human behavior is unpredictable. A strategy that works today might fail tomorrow.
- Suggests lower quality. Too many discounts can make your products seem cheap. Balance is crucial to maintaining a premium image.
🫵 Make it work for you
Psychological pricing can be a powerful tool—but it’s all about balance. When used thoughtfully, it can draw customers in and drive sales. But if you lean too heavily on it, you might find yourself stuck in a cycle of endless discounts and wary customers.
The key? Pair smart pricing strategies with genuine value and stellar products. After all, a great deal only works if what you're offering is worth buying.
BITES OF THE WEEK
- McDonald’s McPsych: The $5 meal deal is a prime example of psychological pricing success.
- Consumer Sensitivity: ICYDK, your prices affect consumers’ willingness to buy a product or service.
- Tools of the Trade: Keep your prices enticing and competitive by using Amazon Repricer tools.
ACTIONABLE ADVICE
7 must-try discount pricing strategies in 2025
Discount pricing is more than just slashing prices—it's about creating value in the eyes of your customers. But as they get smarter and more practical, the sole offer of ‘saving money’ loses its charm. You have to sell them the value of what you’re offering.
🗒️ To help you do this, Shopify listed 7 discount pricing strategies you can try in 2025:
- BOGO deals. Who doesn't love a freebie? BOGO deals have stood the test of time because they feel like a win-win for shoppers.
- Tip: Instead of a straight buy one, get one offer, mix it up with the “get one” part. For example, you can partner a free camera bag or tripod with a camera. Don’t forget to track responses to see what works best.
- Free gift. Throwing in a small, unexpected gift can make a customer's day. It doesn't have to break the bank—think branded stickers, samples, or small accessories. 🎁
- First-time customer discount. For those who leave a site without buying, offering a first-time discount can be the nudge they need.
- Tip: A simple pop-up with a 10% off code can turn browsers into buyers.
- Tiered discounts by spending thresholds. Offer discounts like 10% off orders over $50 or 20% off over $100.
- Tip: Start by checking your average order value (AOV) and set your thresholds slightly higher to encourage bigger baskets.
- Personalized discounts that make your buyers feel seen, such as sending a birthday discount or recommending products based on past purchases.
- Flash sales. Nothing sparks action like a ticking clock! Flash sales create a sense of urgency that taps into FOMO. ⚡
- Tip: Announce these quick deals through email blasts or social media to create buzz and drive fast sales.
- Early bird VIP discounts. Offer exclusive early access or discounts to VIPs during product launches or seasonal sales. This not only rewards your best customers but also helps you predict demand and manage inventory.
📌 Caution: It’s not a one-size-fits-all
That’s why it’s crucial to mix and match tactics to find what resonates with your audience. Whether it's a surprise gift or a high-energy flash sale, the right discount at the right time can turn casual shoppers into loyal customers.
