Pricing is such an important element of sales. How much? It can make or a break a deal. It is used from branding (i.e. “prestige pricing”) to selling of soon-to-be discontinued product lines.
So how do you price your product/service? There’s cost pricing which just covers your costs and expenses and maybe leaves a little margin. Then there’s prestige pricing which sets the price very high so the customer can feel special for paying so much. There are many other strategies too.
For example if you want to sell a $25,000 car you sell it next to a $40,000 car. Suddenly $25k doesn’t seem as expensive. This is an example of Anchoring. Anchoring is the human tendency to rely too heavily on the first piece of information (i.e. the “anchor”) offered when making decision.
This great article from Blue Perks discussed the many more pricing strategies you should and shouldn’t use.