The Psychology of Price: How to use price to increase demand, profit and customer satisfaction

there are four primary drivers of value. Two of the drivers (on top), you will seek to increase. The other two (on the bottom), you will seek to decrease. (Yay) The Dream Outcome (Goal: Increase) (Yay) Perceived Likelihood of Achievement (Goal: Increase) (Boo) Perceived Time Delay Between Start and Achievement (Goal: Decrease) (Boo) Perceived Effor

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In both cases, we don’t look at the true, absolute value presented to us: $20 for a five-minute drive. Instead, we consider $20 compared to $60 and to $1,060 respectively. We compare the relative advantage of $40 shoes to $60 shoes, and decide the money is worth the time. Then we compare the relative advantage of a $1,040 patio set to a $1,060 one

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Create value: The quality of materials, performance, and design all drive the perceived value of customers. This is also where innovation comes into play. Communicate value: This is how you influence customers’ perception. It includes how you describe the product, your selling proposition, and last but not least the brand . Value communication also

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“value to customer.” The price a customer is willing to pay, and therefore the price a company can achieve, is always a reflection of the perceived value of the product or service in the customer’s eyes. If the customer perceives a higher value, his or her willingness to pay rises. The converse is equally true: if the customer perceives a lower val

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