Episode 27: Secrets of Pricing & Selling with Allan Langer - Part 1
Allan Langer, bestselling author of “The 7 Secrets to Selling More by Selling Less”, joins Ben and Mark on this episode of The Friday Habit. Allan has committed his career to understanding and teaching about pricing psychology and consumer behavior and his insights could be game changers for entrepreneurs and business owners.
Allan has found that most decision makers come up with their pricing based on a computer-generated algorithm or a formula they have created to get them their desired profit margin. But what if this method is severely undercutting the margins you could be making if you had a pricing strategy. You have probably noticed that most prices end in the number 9, but did you know that this practice is grounded on research that shows that consumers feel good about paying for products or services ending in 9? They haven’t been able to determine why, but repeated studies have shown this result.
A second pricing strategy that Allan recommends is to always provide your clients with 3 tiered options. You could use the movie theater popcorn example of a small for $5, a medium for $7.50, or a large for $8.00. By making the large only slightly more expensive than the medium, you are positioning it as the best option psychologically, which will make your customer feel good about their purchase from the beginning. You can sell with integrity and still get the client to choose the option that is best for both of you.
Regarding determining your pricing strategy from the start, Allan says that it is imperative to decide what you’re worth and stick with it. Do good work and don’t devalue your services just to attract the “price shoppers”. You don’t want to work with them anyway.
Come back next week for the conclusion of our conversation with Allan!
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