In one of my favorite entrepreneurial books, Priceless, the author William Poundstone makes a compelling case that when it comes to pricing, sometimes even bright entrepreneurs and marketers can fall victim to just going with their gut.
People tend to be clueless about prices. Contrary to economic theory, we don’t really decide between A and B by consulting our invisible price tags and purchasing the one that yields the higher utility. We make do with guesstimates and a vague recollection of what things are ‘supposed to cost.’
The truth is, spending time to utilize smarter pricing methods will go a long way in helping you improve your bottom line, because you could be losing out on a boatload of money simply because you are pricing your products incorrectly.
Below, you’ll see 7 common pricing mistakes that can kill your sales, and I’ll show you the research behind why they affect purchases and what you can do to fix them for good.