understand the variables affecting the perception of a price I am amazed how often I talk to business people, and even marketers, who fail to understand the psychology of pricing. Few things impact more on profitability, and few things have more potential to maximise return on investment, than optimal pricing. However, most businesses make big […]

understand the variables affecting the perception of a price I am amazed how often I talk to business people, and even marketers, who fail to understand the psychology of pricing. Few things impact more on profitability, and few things have more potential to maximise return on investment, than optimal pricing. However, most businesses make big decisions about pricing without understanding it. In Australia, there seems to be a view that pricing is all about discounting. Pricing strategies increasingly turn into a race to the bottom. But do the people setting these prices understand the importance of context, the power of anchoring, the secrets behind pain minimisation, the impact of reputation and brand, the assessment of value, the importance of having a reason, the potential simplicity and the visual cues that impact on how a price is viewed. Few really understand these things, and these are just a few of the…