When it comes to money and the idea of value, there’s as much psychology in play as math, if not more. And the knowledge of that fact can mean several different thing to you. You can use that knowledge to help you with your purchases, determining value based on logic, or your can use that knowledge to help you price things to your desired end, through various mind-related steps.
So if you’re in a position to buy or sell, make sure to consider the psychology of initial pricing, the psychology of value, environment and its relationship to pricing, how one-time offers work, and when you can use various forms of targeted manipulation.
The Psychology of Pricing
Especially when it comes to quotes on digital things, pricing an item correctly can be a little daunting. There’s the balance you have to find between showing people that something has worth because of the time and effort you’ve put into it, and also not going so steep that the right people can’t afford it. There’s also the balance between hourly quotes and full project quotes, so you have to balance the pros and cons accordingly.
The Psychology of Value
And when it comes to the pure psychology of value, think about the experiment where people think a drink is worth more in a heavy glass vs. a paper cup. Variations on that experiment have been done countless times, and so value in many cases is entirely based upon perception, so as a producer, you’re trying to increase the perception of value, and as a consumer, you’re trying to eliminate the factors that will fool you. Once again, it’s a delicate balance of guesswork and sensory input.
Environment and Pricing
The environment of a sale has a lot to do with where pricing will end up as well. If you’re in a group of people who are all excited to buy something for a certain amount of money, the part of your brain affected by group activities is going to want it, regardless of price. So social psychology affects pricing in all sort of interesting ways.
And you can research pricing and marketing for years and not even get to the end of the available information that marketers have gathered over time. Products and services are often frighteningly similar, but come to different price points simply because of research and development into the math behind supply and demand.
Targeted manipulation of pricing is a final double edged sword for you to think about. If you’re the target, you need to figure out how to use logic to get you out of the feeling of needing to purchase something, whereas if you’re the seller, the better you are at creating the emotional need, the better your sales numbers are going to be.