Strategic Pricing Techniques
The Psychology of .99 Pricing
One common question on pricing is when to use round pricing (e.g. $10) and when to use just-below pricing (e.g. $9.99). According to Ariyh, use round pricing when it’s a premium product, or when the purchase is feeling or pleasure-driven (like flowers, self-care). And use just-below pricing when the product is value-based or when you are running a sale.
Leveraging Price Perception
In many cases, higher prices can create an impression of higher quality, especially when products aren't easily comparable(e.g. design is different, material is different, etc.). This principle of perceived value pricing can be particularly useful for unique, handmade items on Etsy. Don't be afraid to price your products at a premium if you're confident in their quality and uniqueness.
The Appeal of Precise Pricing
Interestingly, prices that appear more irregular or precise can sometimes be perceived as fairer by customers. For example, a price of $24.76 might seem more meticulously determined than $25.00, potentially leading customers to believe the price is more legitimate or even that they’re getting a better deal.
Emphasising Savings in Discounts
When offering discounts, focus on presenting the larger number to make the deal seem more attractive. If a 10% discount saves the customer $20, say "Save $20" in your marketing materials rather than "10% off." This approach makes the savings feel more substantial and can be more effective in driving sales.
The Power of Framing
How you present information can significantly impact your customers' perceptions and decisions. This is known as the framing effect. For instance, stating that a product contains "90% natural ingredients" sounds far much better than saying it has "10% artificial ingredients," even though they’re saying the same thing. As an Etsy seller, pay attention to your messaging and see whether you can frame any of your text differently to leverage this effect.
Storytelling
Never underestimate the power of a good story. Sharing the inspiration, process, and journey behind your products can significantly increase their perceived value and improve conversion rates. Customers often connect emotionally with products that have a compelling narrative, making them more likely to make a purchase. Consider weaving your brand's story into your shop's About section, product descriptions, and even packaging inserts to create a deeper connection with your audience.