What are some effective case studies on psychological pricing?

What are some effective case studies on psychological pricing?

One notable case study is from the retail giant, Target, which used psychological pricing by setting prices just below whole numbers, like $19.99 instead of $20. This strategy increased sales significantly.

Can you give me another example?

Sure! Another example is from the software company, Adobe, which implemented tiered pricing. By offering multiple pricing tiers, they encouraged customers to choose the middle option, which increased overall revenue.

What psychological principles are at play in these strategies?

The principles include the left-digit effect, where consumers focus on the first digit of a price, and the decoy effect, where the presence of a less attractive option makes another option more appealing.

How can I apply these principles to my business?

You can start by experimenting with pricing strategies like charm pricing (ending prices in .99) and offering tiered options to guide customer choices.