It’s close to that time of year and while we’d ordinarily write about how to make your holiday promotions pop, this year we’re going to focus on how to make them ring—as in, ring in those holiday sales.
We’re talking about psychological pricing strategies that can boost sales for your small business promotions.
This is more than just discounting. It’s also about using charm pricing, anchors and more. All are tried and tested tactics that work in retail and service sales.
Let’s dive into the psychology first.
Use the power of perception
Perception is powerful. And it affects how a customer perceives the value of something they’re planning to buy. As the seller, you can just stick a price tag on it and hope that price is received well by the buyer.
But just like a gourmet restaurant can charge more for a meal with simple ingredients, you can use the right presentation and a few extras to boost your offer’s perceived value.
You want your customer to feel like they’re getting a great deal overall, no matter the price.
Read on for a few pricing strategies to help.
Pricing strategies for small business promotions
Bundling Deals
Who doesn’t want to feel like they’re getting more for their money? Bundles increase perceived value, while also leading to a higher order amount.
Try bundling related products, related services or even unrelated or unexpected items.
Consider Aldi’s Wine Advent Calendar—a very specific type of bundle packaged for the holidays. They first popularized it in 2019, offered it in limited quantities and now sell out quickly every year.
Other examples include his-and-her bundles, work-play or work-travel bundles, or 2-for-1 or annual bundles.
Raising your prices next year? Offer an annual bundle to lock in this year’s price.
Limited-Time Offers
Put a time limit on discounts to create urgency, a powerful sales motivator. This is the concept behind Black Friday and Cyber Monday. You can do the same for other dates or other times of year. “Get 15% off during our anniversary weekend.” The urgency can push customers off the fence and into the cart.
Pricing Anchors
This strategy works especially well for service businesses. It’s about giving a higher-priced option right next to your standard offers, making them seem like a steal.
When customers see the premium price, the mid-tier option (the one you expect to sell) will seem more attractive in comparison. Many consultants use this strategy to great effect.
Unexpected Subscription Pricing
Consumers are used to subscriptions and monthly payments now. What about creating one for your service or product?
Consider a subscription model that can add convenience and/or value. The more unexpected the better. We’ve written before about an aquatic vet who offers quarterly or yearly pond service for those with Koi ponds. Other services can use the same model.
Tiered Subscription Levels
Building on subscriptions, offering different pricing tiers are another way to encourage upselling at different levels. For example, you could offer basic, standard, and premium packages with different features and support. This gives customers a little more flexibility and a few options to suit their budget.
This strategy isn’t new, but can get attention if it’s not typically used for your product/service or in your industry.
Charm Pricing
This is another strategy you likely know well. Charm pricing shows the power of 99 cents. A price of $19.99 always sounds better than $20, doesn’t it? Our brains naturally see it as a lower price.
You can do the same. Price your products or services just below a whole number or an uneven number. Instead of $50, try $49.99 or $48.72. It may seem minor, but those few cents can tweak buying behavior.
Follow through with stellar service
Your success with pricing won’t mean much if you don’t pair it with stellar service. Make sure your team is well aware of your promotional pricing and is ready to answer any questions.
Because today’s customer is more stressed than ever and will truly appreciate great service on top of great value.
We hope these strategies help boost the holiday season for your business. If you need our help, get in touch!
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