How to use psychological pricing techniques to sell more on Shopify

Pricing is one of the most important aspects of any successful online business, but it's also one of the most difficult ones to get right. When it comes to online stores, the use of psychological pricing techniques can be an important tool for increasing sales and revenue. By using these, you can influence how buyers perceive your prices, and ultimately boost your bottom line. In this blog post, we'll discuss some of the most common techniques such as anchoring, ‘charm’ pricing, and reducing the ‘pain of paying’. We'll explain how each technique works, give some examples and tell you when it's appropriate to use them. So, whether you're just getting started with your online store or you're looking for ways to improve your current sales strategy, read on!

Product Page Layout

Use a light-colored background

When it comes to the design and layout of your pricing pages it’s highly recommended that you use light colors and backgrounds over dark ones. Dark colors have a feeling of ‘weight’ to them and therefore can make your prices seem ‘heavier’.

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Display no more than 3 to 4 products per row

This is based on the FINST spatial index model, which stands for "Fingers of Instantiation." Our brains are able to process information more effectively when it is laid out in a linear fashion and struggle to follow more than 3 to 4 moving objects on a screen.

By limiting the number of items displayed per row, you can help customers focus on the product they are interested in and make it more likely that they will make a purchase.

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Price Selection

Use round numbers for emotional purchases

When it comes to emotional purchases such as jewelry, perfumes, luxury items or holidays, round prices are the most effective. For example, buying a handbag for $200 will likely feel more ‘right’ than buying it for $199.99.  Round numbers ‘feel’ right and trigger an ‘easy’ sensation that matches the nature of an emotional purchase and that feeling is then associated with the decision to buy.

Charm Pricing

Odd prices are most effective for rational purchases such as toiletries, essential items, and electronics.  A very easy psychological pricing technique to employ in this case is ‘charm’ pricing or reducing the left digit by 1 so that $50 becomes $49.99. This works because our brains begin to encode the price as soon as we see the 1st digit and before we finish reading the entire number.

Choose Prices with lower syllables

Studies show that our brains perceive prices that sound shorter as being smaller. Take for example $26.83 (6 syllables) and $27.16 (5 syllables)- intriguingly, even without saying it out loud,  the second price feels lower simply because it’s fewer syllables.  

Removing commas from prices also has a similar effect especially as it also visually shortens the price.

Price Display

Use small fonts for the price & embolden the title and product description

When selling singular products, the use of heavy, bold fonts will create a visual effect that adds a feeling of ‘weight’ and ‘heaviness’ to the product’s price. Small fonts in muted colors will have the opposite effect and they should be used especially if your prices are not very competitive (Be careful with this when displaying competitive low prices and discounts, as these should be clearly highlighted - find more details  here.

The use of this technique also means that the customer’s attention is more focused on the product itself. This is also why you should embolden and highlight the product title and description to enable customers to focus on the benefits of what they’re buying rather than the price.

Anchoring

One of the most commonly known and also effective psychological pricing techniques is anchoring. The anchoring effect is a cognitive bias whereby an individual's decisions are influenced by a particular reference point or 'anchor'.

The key to achieving this with pricing is making sure that your customers are shown a large number before they see the actual prices of your products. This number does not have to be a price itself and can be easily contained within a website banner in messages such as : ‘Join 10,000 happy customers!’ or ‘With over 5000 positive reviews…’ . Make sure your ‘anchoring’ number is emboldened and easy to notice.

Another way to achieve this is to list the most expensive items first to establish a higher reference price which in turn makes the subsequent items seem cheaper.

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Reduce the 'Pain of Paying'

Studies have shown that not displaying the currency symbol whenever possible helps reduce the ‘pain of paying’ as it distracts shoppers from the cost.  The currency should however be included in most scenarios, but you can try and achieve a similar effect by reducing the saturation and opacity of the currency symbol.

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Have you tried any of these pricing techniques in your online store? If not, it might be time to test them out. At the very least, understanding how and why they work should give you some new ideas for increasing sales. For more information on how to use psychology to display discounts or the price per unit of your products check out our other articles. And as always, if you need help putting any of this into practice, let us know – we’re here to help you grow your business!

References

  • Coulter, K. S., Choi, P., & Monroe, K. B. (2012). Comma N’cents in pricing: The effects ofauditory representation encoding on price magnitude perceptions. Journal ofConsumer Psychology, 22(3), 395-407.Dehaene, S. (1992). Varieties of numerical abilities. Cognition, 44(1-2), 1-42.
  • Wadhwa, M., & Zhang, K. (2015). This number just feels right: The impact of roundedness ofprice numbers on product evaluations. Journal of Consumer Research, 41(5), 1172-1185.Janiszewski, C., & Uy, D. (2008). Precision of the anchor influences the amount ofadjustment. Psychological Science, 19(2), 121-127.Wieseke, J., Kolberg, A., & Schons, L. M. (2016). Life could be so easy: The convenience effectof round price endings. Journal of the Academy of Marketing Science, 44(4), 474-494.Yan, D., & Sengupta, J. (2021). The Effects of Numerical Divisibility on Loneliness Perceptionsand Consumer Preferences. Journal of Consumer Research, 47(5), 755-771.
  • Thomas, M., & Morwitz, V. (2005). Penny wise and pound foolish: the left-digit effect in price cognition.Journal of Consumer Research, 32(1), 54-64.
  • Yang, S. S., Kimes, S. E., & Sessarego, M. M. (2009). Menu price presentation influenceson consumer purchase behavior in restaurants. International Journal of HospitalityManagement, 28(1), 157-160.

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