Charm Pricing — why I don’t recommend it

Photo by Brett Jordan on Unsplash

I’ve noticed that many businesses — maybe yours — use a pricing tactic that is manipulative, and oftentimes they don’t even know it.

Examples:

$14.95 instead of $15
$47 instead of $50
$999 instead of $1,000

Do you realize what’s going on here?

The tactic is called “charm pricing” or “psychological pricing” and you probably encounter it every time you go shopping.

Few consumers realize what’s going on:

• It makes you think a price is smaller. For example, $947 seems like it’s “under a thousand dollars” instead of $1,000 which can allow people to think “wow, it’s a thousand dollars!”
• The weird price can temporarily short-circuit your rational decision-making process and make you buy without considering your budget.

In short, it is manipulation.

Is that the way we want to start the relationship with a customer? By tricking them, trying to prevent their mind from considering the real price of our offerings?

Once I realized this, I could no longer do it in good conscience. (And having a clean conscience is vital for running a successful authentic business!)