Pricing psychology, package pricing, power of free - delivered at Product Camp London 2011

1. Pricing Strategy @paullomax

2. FREE! From £19.50

3. Starts at £19.50

4. Suddenly £71.25

5. Removing doesn’t save

6. FREE is powerful It is preferred by customers even when the rational paid-for choice may be a better deal. A free choice carries no risk. http://www.neurosciencemarketing.com/blog/articles/the-power-of-free.htm

7. Compromise marketing A high-end and high-price product in a line-up can boost sales of the next product in the line-up , even if it sells poorly itself http://www.neurosciencemarketing.com/blog/articles/compromise-marketing.htm

8. Decoy marketing If two products have a similar appeal, offering a third inferior product at about the same price may increase sales of the other products. This differs from the usual ‘good, best, better’ strategy. http://www.neurosciencemarketing.com/blog/articles/decoy-marketing.htm

9. More choices equals fewer sales A product line-up must offer enough choices to ensure that a customer can find a satisfying product, but not so many that the customer will be bewildered or demotivated. http://www.neurosciencemarketing.com/blog/articles/more-choices-fewer-sales.htm

10. Establish an anchor price A customer seeing a high number establishes an anchor price in their minds, making any subsequently cheaper offers appear to be a better deal http://www.neurosciencemarketing.com/blog/articles/anchor-prices.htm

11. Deal with ‘tightwads’ 25% of customers may not buy a product even if it makes economic sense and special tactics need to be employed for these customers, especially copywriting. http://www.neurosciencemarketing.com/blog/articles/five-keys-to-selling-to-tightwads.htm

12. Maximise revenue from ‘spendthrifts’ Just 15% of customers have an unusually low sensitivity to the pain of purchasing, but luxury items are purchased disproportionately by this group. The trick is closing the deal. http://www.neurosciencemarketing.com/blog/articles/spendthrift-selling.htm

13. Example FREE: A very cut-down trial service, purposefully hampered in some way, capture the tightwads to grow volumes and marketplace liquidity £100: Decoy product, similar but inferior to the one up, designed to boost sales but not sell many itself £129: Target product, where we want to see most volumes – roughly equates to AOV. £399: Anchor product, targeted at spend-thrifts, designed to boost sales but not sell many itself

14. Obligatory funnel: value

15. More reading www.neurosciencemarketing.com

16. Thank you http://twitter.com/paullomax