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The Dark Art of Psychological Pricing Strategy
- Business Development, Confident Conversion, Sales Process
- Lifepuzzle
“Psychological pricing involves far more than just presenting value. It also involves knowing your buyer better than he knows himself.”
~ Chandell Labbozzetta
What Does Psychological Pricing Entail?
I’d like you to think very carefully about the above question because it is absolutely critical to your understanding of psychological pricing and why people do – or do not – push back when you tell them the price.
Most of the time it’s not actually the dollar amount they’re pushing against – contrary to popular belief not everyone wants to buy the cheapest product available.
… It’s not even the value proposition you present (although that’s important as I’ve mentioned elsewhere).
… At the heart of every sale the buyer has to say “yes” to two questions:
- Do I trust this person and believe what they are telling me is true; and
- Do I like this person enough to work with them or the company they represent. (Note the modifier “enough” because it’s very important)
This means that one way or another you have to create some level of rapport AND you absolutely MUST show that you understand them. If you can’t do those two things then you might just as well throw your pricing strategy out the window – it doesn’t matter if you charge $2, $200, $20,000 or any other amount – you’ll be confronted with suspicion and objections.
It’s About the Psychology!
I started my career in sales when sales training was mostly a question of scripts and pushing for the sale… And I hated it with a passion.
I really didn’t like the way that it made me feel and I would watch my mentors kind of push people into signing on the dotted line, see the hunted look in the victim’s eyes and vow never to do that to anyone.
So, I didn’t.
Instead, I studied up on the product.
I studied up on the person / company I was visiting.
I prepared myself thoroughly.
… And closed an incredibly high number of appointments and sales and won almost every sales award.
I quickly realised that it wasn’t a question of the price of the product, success lay in my understanding of the psychology of the buyer – once I had that, my pricing strategy fell right into place and the buyer would happily accept the product that I had already guessed would be most appealing to them.
In other words, my psychological pricing strategy became:
- Understand my buyer’s psychology and preferences;
- Select the product or package that was best aligned (the one they were really going to fall in love with); and
- Offer them that particular thing they already wanted.
This worked like a charm – unfortunately, it was very difficult to teach others – and if my prospect was in a hurry I couldn’t quite close the sale.
The Benefits of Psychological Pricing (No Degree Necessary)
You might be thinking – “Oh great, now I’ve got to get a degree in psychology if I want to sell.”
Actually, that did cross my mind at one stage and I was getting ready to enrol.
And then…
I went to a Neuro-Linguistic Programming (NLP) course. Practitioner level (for me) was more about sorting myself out as I’ve mentioned in my book Confident Closing: Sales secrets that grew a business by 400% in six months and how they can work for you! In Master Practitioner, however, I learned how to discover a person’s buying strategy in less than 5 minutes. At last, I had found the key!
This offered two incredible benefits:
- For myself: My preparation time was slashed and my system for understanding the other person became far more certain;
- For others: at last I had a simple multi-step formula that other people could implement flawlessly.
This one simple technique – layered on to the strategies I’d learned earlier cut 30 minutes off my sales calls and made it easy to get through to decision-makers. It also totally transformed my pricing strategy and the way I presented my pricing whether I was selling packages worth thousands, tens-of-thousands, or even hundreds-of thousands AND it was easily replicable.
What If I’m Not a Natural People Reader?
The great thing about this technique is that you’ll quickly discover that if you have ears and eyes you can learn to read people easily and effortlessly (which is not just helpful in your business life as you can imagine). It’s even better when you realise that once you are familiar with this technique and you add the tiny refinement I teach my students, you can move away from painful small talk and become the person your prospects and clients love to talking to so they always take your calls.
Becoming THE Preferred Supplier
This one small tweak took a powerful process to the next level and meant that skyrocketing sales was a no-brainer and taking advantage of psychological pricing meant that clients took the most suitable package for their needs close to 100% of the time – instead of playing it safe and taking something that wasn’t quite right for them.
If you’d like to learn more about how to do this yourself, why not join our next program?
Just imagine what would happen if you spent more time talking to ideal prospects and closing sales with qualified people in the next 3 months than you had in the past 3 years. This simple technique puts your pricing strategy on steroids – and makes every sales call fun and energising.
Through expert sales training, NLP coaching, and business development consulting, we’ve helped professionals refine their communications, accelerate their sales and supercharge their personal satisfaction and confidence. Do you want to be one of our success stories?
