How to shape your customer’s perception of price

Pricing is one of the most important aspects of running a business or selling a product. As a business owner, it’s important to note that customers don’t just interact with the price itself, but also their perception of it. Price perception is determined by many factors, such as the quality of the product, customer service, and perceived value.

Understanding the psychology behind customer perception can help you make better pricing decisions, and ultimately drive sales. In this article, we’ll delve into the main components that influence a customer’s perception of price and give you some tips to shape it in your favor.

TIP 1 Quality: The perception of quality can strongly influence a customer’s willingness to pay.

Customers are more willing to spend more money when they think they’re getting a high-quality product or service. So, don’t hesitate to invest in creating a product that’s visually appealing and well-designed, and ensure that it’s of a consistently high quality.

TIP 2 Scarcity and Demand: When customers perceive that a product is scarce, or hard to obtain, they’re more likely to be willing to pay more for it.

Tapping into the fear of missing out (FOMO) is an excellent way to frame your pricing strategy. Scarcity can be created by limiting the availability of a product, creating special or limited editions, or introducing flash sales.

TIP 3 Social Proof: Social proof is an excellent way to establish the value of your product or service.

Customers’ perception of price can be shaped by the opinions of others. Ensure that you have social proof on your website, for example, displaying customer testimonials, reviews, or referrals.

TIP 4 Framing: How you present the price can greatly affect how customers view it.

Changing the context in which the price is presented can trigger different perceptions. For example, presenting a $300 product as $1 a day for a year can make it feel more affordable. Moreover, offering different pricing tiers can help customers feel like they’re getting a better deal, and this can increase the chances of a successful sale.

TIP 5 Customer Service: Price can be influenced by the whole experience of dealing with your business, including customer service.

Give your customers a positive experience, and ensure that they feel that they are taken care of. This can lead to them feeling that the price is an excellent value for what’s included, and this can increase the chance of them returning.

Download FREE Price Sensitivity Workbook It has 5 questions you should ask your customers to understand their price sensivity.  Before using the sensitivity workbook read more on Understanding the price sensitivity of buyers.

Creating a successful business requires attention, experimentation and good decision making. Having the right pricing strategy plays a pivotal role in this, but just as important is understanding your customer’s perception of that pricing. By considering the above components, you can tweak or adjust the way you present your product or service resulting in a much higher likelihood of success. Keep in mind that every business is different- so don’t stop experimenting and testing. Use these tips as a guide, learn from your experiences (good and bad), and adjust accordingly. Ultimately, understanding how to shape your customer’s perception of price will have a significant impact on your bottom line.

Here are the top takeaways from this article that will help you make the right pricing decisions:

• Quality is essential to influence a customer’s willingness to pay, so investing in creating well-designed products of a consistently high quality is recommended.
• Framing scarcity and demand in such a way as to tap into customers' fear of missing out can increase their willingness to pay more for the product.
• Social proof and customer testimonials help establish the value of the product or service, prompting customers to be more willing to pay.
• Changing the context in which price is presented can create different perceptions, making expensive items seem more affordable.
• Providing excellent customer service gives customers the feeling that they are taken care of, increasing the chance of them returning and viewing the price as an excellent value.