How often have we heard this phrase from marketing gurus that we need to build and package a product in such a way that it sells itself? Is this actually possible? According to various psychological and marketing case studies prepared by researchers from Vanderbilt University, Wharton and others, there are a number of emotional and psychological factors at play when the consumer is out checking your product out. By making use of the right strategies, you can in fact make your product sell itself. Here are some tips on how to do this.
1. Make Your Product Premium
If you are not in a business that has been commoditized, then one of the best ways to get your product to sell itself is by pricing and packaging it better than competition. A study conducted by researchers from Stanford has shown that customers who are offered comparative pricing sheets that pit your product’s low price point against competition may in fact have a negative effect on sales.
The research concluded that people do not want to take up the risk of purchasing a lower priced product. They would rather go premium and buy a higher priced product that also offers better quality and support. According to Jay Barnett, the founder of premium private taxi service, Priority Pickup – his company has been able to attract customers even though their services are slightly more expensive than regular taxis. Barnett points out that the reason is because his company has been able to spell out the value his private chauffeur car booking service provides to customers over regular car rentals.
2. The Power of Context
How do you sell your overpriced product? Place it in a context where it appears more affordable. A research conducted at the Vanderbilt University showed that it is more likely for a business owner to sell their $3000 suite if they placed it next to a $10000 suite. If your dinner is priced at $60, it may sound affordable or overpriced depending on whether the alternative is a $20 meal or one that costs $150. And based on the options available, people are more likely to pick the $60 dinner.
3. End It With 9
It is a well known fact, even among customers, that a lot of products are priced at a figure ending in 9 because it seems lower than the absolute price. For instance, products are priced at $9, 19, $99, etc. instead of $10, $20 and $100 instead. Now you may assume that this tactic should no longer be working as good as in earlier times since almost everyone now knows the rationale behind the pricing. But surprisingly, this strategy still works. And guess what, a study recently showed that while the same product was sold at three different price points – namely, $34, $39 and $40 – it sold the best at $39. Not even when it was priced $5 cheaper at $34!
4. Keep Your Pricing Simple
The Economist is a popular business newspaper that is available on print and online. Their subscriptions were available for prices between $59 and $125 where at the lower end, subscribers received a web only subscription and at the upper end, they could opt for a print only or a web+print subscription. Although both these subscriptions were available at the same $125 price, a psychological analysis showed that people saw the $125 price point a little steep. By removing the print-only offer and providing only a web-only or a print+web subscription, subscriptions increased multi-fold. By positioning your product for value seekers, as opposed to bargain hunters, you can let your product sell itself.
These are four tips to make your product more valuable and easier to sell in the market. These are simple but psychologically powerful parameters that contribute to your business being able to sell your products much more effectively. What has been your experience in using psychologically influencing your customer? Tell us in the comments.