In the world of business, pricing strategies, or ‘pricing psychology’ is nothing new.
It’s a technique used in every sales environment to take advantage of the subtle emotional responses people have to different price points and offers.
So what makes it relevant to the event industry?
No doubt you regularly witness and experience the emotional rollercoasters your clients go through when planning their special events, but the emotions of pricing are much more subtle. Using and playing to these emotions can be the difference between booking the client, or seeing them walk away.
If you’re new to pricing strategies, there are some easy methods to get you started.
Here are our top tips for keeping your brides on the hook and getting that next booking.
Buy one, get one free
One of the most common pricing strategies that you’ll find in the supermarkets – who can resist the offer of a freebie?!
As consumers, we naturally gravitate to the word ‘free’, even when we know the product we’re paying for is probably priced at a premium to cover the cost of the ‘free’ item.
As a seller, you need to think about what you could price with a buy-one-get-one-free offer – maybe table settings or decorations that your brides are likely to need a lot of. You need to be sure you’re still covering all your costs and making a small profit, even though you’re offering something for ‘free’.
Alternatively, think about a free add-on that you could offer when your clients buy a certain package or more expensive service – like a free print or photo album with your photography package, or a CD of your band playing their wedding playlist.
Highlight new prices
Another staple tactic in the supermarkets – drawing attention to new, lower prices – is a simple strategy that you can bring into your own business.
Whether you’re having a seasonal sale or slashing prices on a whole range to bring in new stock, clearly crossing out your old price and replacing it with the new, shows your clients what they might have paid on another day, and the great deal they can get today.
You can use bold text, strike-through, images and vibrant colours on your profile to highlight new prices, just make sure people can still see the old price underneath.
Also known as ‘price ending’, charm pricing is a simple technique that involves ending your price with a ‘9’. We see this every day as we shop online and in-store, without really noticing it, but that 1p or £1 difference makes a huge impact in the mind of the consumer.
If you’re selling a photography or musical entertainment package with a retail price of £2,000, try pricing it at £1,999 instead. To the client, suddenly that sum feels a whole lot more reasonable and affordable, starting with that magic 1 instead of the much larger 2.
Countless studies have shown solid evidence that people are more likely to make an order with this odd pricing strategy, and you may well be asking: WHY?
It’s largely down to the rational thought process – people often consider a ‘round price’ to be shop owners maximising their prices to make more profit. The likelihood of profit margin calculations resulting in a round number is slim, so the business must have chosen the next rounded figure above their calculations.
Charm pricing, meanwhile, suggests that the business has gone out of their way to get the price down as low as they can for their consumers. That 1p or £1 difference feels like a real saving that clients want in their own pockets, not in the business’.
A completely different approach to charm pricing is the high-end ‘prestige pricing strategy’.
This method sets prices of luxury packages at a significant premium, playing to a powerful niche of clients who associate higher prices with better quality items.
Such consumers are willing to pay higher prices as they perceive a range of benefits in doing so – anticipating superior quality, better service, and a level of social recognition for owning a certain item, brand, or buying a specific service.
As an event business, you should absolutely capitalise on this high-end pricing strategy. With the one-time events you’re involved in, there’s a huge opportunity to highlight the exclusivity of the products, packages, and services you offer, which only the most top-end clients can afford.
Make sure your marketing materials highlight the very best of what you offer, giving your clients an idea of what they can aspire to.
Comparative pricing is one of the most effective psychological pricing strategies. It’s a simple technique that can really make a difference to your bookings.
By placing 2 similar packages next to each other, at 2 very different price points, you make one much more attractive to clients, than the other.
This psychological game works particularly well with visual services – place two similar packages next to each other, with a similar quality level, but at different prices. Much like the prestige pricing strategy we already mentioned, shoppers perceive higher price to mean increased quality, so will end up buying the more expensive option – like your premier photography package – which is great for your bottom line!
Not to be confused with comparative pricing, mentioned above, one of the more risky pricing strategies is comparing pricing – where you highlight the prices of your direct competitors, and how your pricing beats theirs in some way.
If their pricing is higher than yours, it may well bring people into your business, but it could also drive them to the competition if they perceive higher prices as better quality (remember the prestige pricing strategy?).
You could also end up starting a dangerous pricing war with other people in your industry, which could be detrimental to both your businesses!
If your prices are higher, you’ll have to work hard to show what added value you’re offering to your clients – make sure you give a more personalised service and pay greater attention to detail at every step.
This is definitely one of the more advanced pricing strategies, so make sure you’re well prepared if you decide to take this approach.
Whichever pricing tactics you decide to try, be sure to monitor your results closely so you know which strategies to use more in the future.
Are your clients lured in with a freebie or a charmed price, or are they more likely to buy into prestige items and your outstanding customer service?
Find the right balance and your bookings are sure to go from strength to strength!