How much are customers willing to pay?

How to create a Behavioral Science Driven Pricing Strategy 

Pricing a product or service is much more than a simple calculation. The goal is to satisfy a customer's psychological need for something, whether that need is to save money, invest in high-quality products or services, or get a good deal! 

Imagine a new restaurant has opened serving delicious pizza. This new restaurant happens to be experimenting with a new pricing strategy: you will be charged 5 cents for each bite you eat. How much pizza do you think you could eat? 

This pricing strategy would make the payment extremely salient, to the point that it would feel painful to us. Pain of paying is just one of the psychological factors we need to consider when making a pricing strategy; we also need to consider perceptions of value, fairness and trust. 

Psychological pricing is based on sending the right messages to customers through price in order to make them feel confident and satisfied with their decision. In this guide, we will look at how to increase a product's perceived value by addressing the psychological needs of the customer, as well as how brands can incorporate behaviorally-based pricing strategies into their business.