If you’re running a business or marketing team, you’re probably focused on three key metrics: cost, revenue, and profit (or margin). Your goal is always to minimize costs while maximizing revenues, often in partnership with a finance leader who sets ambitious growth targets. But the fastest path to those numbers rarely starts with spreadsheets—it starts with how buyers think.
For many business leaders, pricing feels purely practical. You pick numbers that cover salaries and keep the lights on. You try to stay competitive because your customers ultimately decide if you stay in business.
There’s a key dimension to pricing, however, that your business may be missing.
You guessed it — it’s buyer psychology.
Pricing goes beyond profit margins. It’s also a marketing lever that can boost sales volume and shorten time-to-purchase. When you think about pricing, you need to focus on more than covering operating expenses. You need price points and messaging that make people feel confident hitting “buy.” This post shows you how to do that—ethically and effectively.
Emphasize Value & ROI Above Cost
Instead of leading with what prospects will spend, lead with what they’ll earn or save. As a marketer, you know costs are always relative to outcomes. Rather than fixating on having the “lowest price,” communicate that your product delivers unbeatable results for the right customer.
Bidsketch, a company that sells proposal templates to agencies and freelancers, illustrates this idea. The product helps subscribers create polished proposals in minutes—a task that might otherwise take solopreneurs hours (sometimes days).
The message centers on ROI: time saved and revenue won. That’s the language buyers care about most.
Business owners are well-aware that time is more valuable than money.
One testimonial highlights a client who cut proposal creation from 3 hours to 45 minutes. Bidsketch also positions the product as a way to slash proposal time in half—clear, outcome-focused language that makes the value obvious.
Collectively, Bidsketch customers report generating $261M+ in new projects—evidence that users can win more business in less time.
Now comes the tough question—how much does this cost? The homepage explains the benefits and value clearly, but what level of commitment is required to get started?
$29 per month.
A smart business owner immediately runs a quick cost-benefit analysis:
Say it takes 3 hours to complete a proposal. Anyone who runs (or works for) a business can approximate their hourly rate. For clarity, assume $100/hour. Using Bidsketch, proposals take ~1.5 hours instead of 3, so the labor cost drops from $300 to $150. If the tool costs $29, the incremental value on that one proposal is $121.
Is the $29 cost worth it? Absolutely. In fact, it’s a no-brainer.
Cost is always in the eye of the beholder. Lead with ROI before cost enters the conversation. When you articulate outcomes in concrete terms, your price looks small relative to the value.
If Bidsketch took a different approach and hid the value on its homepage, a $29 monthly price would feel much bigger.
Small business owners and entrepreneurs are famously frugal. They’re often investing personal savings back into the company. Why spend $29 on a proposal tool when you could put that money into Google Ads (or next week’s groceries) instead?
All of a sudden, cost becomes the headline.
“It’s Miller Time”
For a beer brand, a slogan that sells “time” instead of “price” might sound odd at first.
But research on “selling time” over money suggests it can be the perfect choice.
“Because a person’s experience with a product tends to foster feelings of personal connection with it, referring to time typically leads to more favorable attitudes—and to more purchases.”
So says Jennifer Aaker, the General Atlantic Professor of Marketing at Stanford Graduate School of Business.
Why does focusing on experience (or time spent) with a product often beat highlighting a favorable price?
Aaker noted that many (around 48% of those analyzed) advertisements referenced time—suggesting marketers intuitively grasp its importance to consumers.
Until recently, few controlled studies backed this up.
In their first experiment, Aaker and co-author Cassie Mogilner set up a lemonade stand using two 6-year-olds (to make it feel authentic).
The lemonade cost $1–$3 (customer’s choice), and they rotated three different signs.
The 3 separate signs to advertise the lemonade were as follows:
- The first said, “Spend a little time and enjoy C&D’s lemonade”
- The second said, “Spend a little money and enjoy C&D’s lemonade”
- The third said, “Enjoy C&D’s lemonade” (neutral sign)
Even with this simple setup, the results were clear.
The sign emphasizing time attracted about twice as many customers, who also paid roughly twice as much.
The researchers offered a few explanations:
- Our relationship with time is more personal than our relationship with money.
- “Ultimately, time is a more scarce resource—once it’s gone, it’s gone—and therefore more meaningful to us,” says Mogilner.
- “How we spend our time says more about who we are than how we spend our money.”
A second study drove the point home.
At a concert with free admission, the real “cost” was time—people stood in line to get good seats. Researchers asked attendees one of two questions.
This time only two questions were asked. The “cost” was actually time, as the concert was free, but people had to “spend” time in line to get the good seats.
The two questions asked by the researchers in this scenario were:
- “How much time will you have spent to see the concert today?”
- “How much money will you have spent to see the concert today?”
The results?
Even where time was the only resource spent, asking about time increased favorable opinions toward the concert.
Not only that, people who waited the longest—incurring the highest “cost”—reported the greatest satisfaction.
“Even though waiting is presumably a bad thing, it somehow made people concentrate on the overall experience,” says Aaker.
So what’s the takeaway?
Marketers should highlight the meaning and experiences their products create before fixating on price. When appropriate, sell the time, not the tag.
The notable exception: prestige products.
If you sell sports cars or bespoke suits, status may trump time. For these purchases, ownership itself carries the value.
“With such ‘prestige’ purchases, consumers feel that possessing the products reflects important aspects of themselves, and they get more satisfaction from owning the product than from spending time with it,” says Mogilner.
When you price your product, factor in the value of customers’ most precious resource—their time. In many cases, emphasizing time saved and outcomes achieved will be more persuasive than a deeper discount.
Be Wary Of Comparative Pricing
You walk into a drugstore to buy Ibuprofen. You’re faced with two options—a major pharma brand and a generic.
The generic is 30% cheaper than its retail equivalent. Why not save a few dollars?
Comparative pricing isn’t as foolproof as it seems. Price comparisons can sway perceptions in unexpected ways.
According to Itamar Simonson, consumers don’t always pick the cheapest option. Many choose the brand that feels like a ‘safer’ bet—or avoid purchasing altogether.
Research from Stanford shows that asking customers to compare prices can have unintended consequences. The study examined both implicit and explicit comparisons.
Implicit comparisons occur when a customer decides on their own to weigh options.
Conversely, explicit comparisons are introduced directly by the marketer or advertiser.
To test comparative advertising, Simonson and Dholakia ran two trials.
The first involved selling CDs on eBay.
The researchers listed top-selling albums in CD format, such as “The Wall” by Pink Floyd.
The cost of the CDs for sale always started at $1.99.
They then “framed” these auctions in two distinct ways.
In one setup, the CD was ‘flanked’ by two additional copies (same title) with a starting bid of $0.99.
In the other, the CD was flanked by two copies starting at $6.99.
The results were clear: CDs flanked with higher-priced options ($6.99) consistently attracted higher final prices than CDs next to $0.99 offerings.
“We didn’t tell people to make a comparison; they did it on their own,” said Simonson.
“And when people make these kinds of comparisons on their own, they are very influential.”
To test explicit comparisons, the researchers repeated the experiment but asked buyers to compare the $1.99 CD to the adjacent offerings.
In that scenario, the starting prices of nearby CDs became statistically irrelevant to bidding on the middle disc.
Buyers also became more cautious and risk-averse:
“The mere fact that we had asked them to make a comparison caused them to fear that they were being tricked in some way,” said Simonson.
People placed fewer bids, waited longer to place the first bid, and were less likely to participate in multiple auctions.
“Marketers need to be aware that comparative selling, although it can be very powerful, is not without its risks.”
Keep that in mind before you directly compare your product to a competitor’s. Use comparisons sparingly, and only when they add clarity rather than doubt.
Instead, you may get better results by highlighting unique strengths, using proof of outcomes, and emphasizing time saved over money saved…
Avoid Option Overload
Pricing is where art meets science.
On one hand, you want to empower customers with information, flexibility, and ‘premium’ packages.
But when it comes to pricing, less is often more.
As Unbounce’s Oli Gardner puts it, “Consumers constantly face “analysis paralysis,” where too many options result in no decision being made.
Gardner explains this with the Toothpaste Trance: an aisle full of nearly identical choices overwhelms shoppers. They stop evaluating individual benefits and start seeing everything as ‘one and the same’, leading to random or deferred decisions.
A famous supermarket jam study by Sheena Iyengar and Mark R. Lepper tested tasting stations with 24 flavors versus 6.
With 24 flavors, only 3% of samplers purchased jam. With 6 flavors, 30% purchased. More choice attracted attention, but fewer options drove action.
Apply the same thinking to your pricing tables. Choose 3–5 services your company truly excels at. Bundle features into those services and present 3 streamlined packages with a clear “recommended” option.
What matters is packaging that maps to your target customer’s jobs-to-be-done. Presentation can be as important as the price points themselves.
Consider the following case study from Visual Website Optimizer:
BaseKit, a popular website builder, wanted to improve the performance of its pricing page. The primary metric was the number of visitors who moved from the ‘Plans and Pricing’ page to the ‘Buy Now’ page.
(For follow-up studies, Visual Website Optimizer recommended tracking revenue as the north-star metric.)
The traffic to the pricing page was primarily paid, so visitors were highly qualified.
They tested a variation with brighter, bolder, clearer pricing, added a testimonial, and made currency selection more obvious. The redesigned pricing page yielded a 25% increase in conversions:
The new design reached 95% statistical significance within 24 hours. Over the full test, it delivered a sustained 25% improvement.
Price Vs. Value
Is price a measure of value? Not necessarily, says research by Goldstein and colleagues: people “do not derive more enjoyment from more expensive wine” when they don’t know the price. Yet other studies show a strong link between price and perceived value: when told a wine is expensive, people rate it higher.
Brain imaging adds another layer.
When participants believed a wine cost more, regions associated with pleasure showed higher activation. In short, price can shape how products feel—before quality differences are even detected.
Dan Ariely found a similar effect with cold medicine: students who paid more reported feeling better than those who bought the same medicine at a discount.
Still, expensive isn’t always better. Budgets are real. Some buyers simply can’t afford higher-priced products or services, even if they recognize the quality. They’ll prioritize essentials over luxuries.
‘Need vs. luxury’ is foundational in economics: people fund necessities—food, shelter, clothing—before splurging on designer goods, exotic materials, or pricey cars.
Some consumers are aggressive comparison shoppers. Others aren’t. And comparisons can backfire.
Comparison shopping helps retailers compete, but it can also position your product as inferior—even when the products are functionally identical. Why? Comparisons send minds wandering: “Why is this cheaper? What am I missing?” People may convince themselves the pricier option has hidden value.
The moral: there’s no cookie-cutter answer on whether to price higher or lower. Different segments have different sensitivities. Your job is to define a focused market and align your price and packaging to the outcomes that segment values most.
Talk to customers and run qualitative research to learn what your target audience values. Build your pricing models around those insights. You won’t please everyone—and that’s fine. Saying “yes” to your ideal customer often means saying “no” to others.
Tricks Of The Trade
CBS News summarized several pricing tactics retailers use to nudge purchases. Here are a few:
Getting Rid of Dollar Signs
A 2009 Cornell University study found that menus without dollar signs are correlated with higher spending. Diners in upscale restaurants spent less when menus used the word “dollars” or the symbol “$”. The reasoning: we’re overloaded with information, and extra symbols draw attention to price. Minimalist menus (‘24’ vs. ‘$24’) keep the focus on the food.
‘10 for $10’
You’ve seen this framing in supermarkets and drugstores. Shoppers assume they must buy 10 to get the deal and load up their carts.
In reality, it’s an anchoring tactic. You can often buy 1 for $1. The ‘10 for $10’ message is designed to increase quantity purchased.
Per-Customer Limits
This language manufactures scarcity. “Limit 3 per customer” triggers a fear of missing out, which nudges shoppers to buy now and buy more. Remember, it’s a framing device more than a supply constraint.
The Power Of ‘9’
“Prices ending in 9, 99, or 95 are called ‘charm prices’. Apparently, we’ve been culturally conditioned to associate 9-ending prices with discounts and better deals.”
-William Poundstone Author of Priceless: The Myth of Fair Value and How to Take Advantage of It
Because we read numbers left to right, we encode $7.99 as $7—especially when skimming. That’s the “left-digit effect”:
“We encode it in our minds before we read all the digits”
-Vicki Morwitz Research Professor of Marketing at the Stern School of Business at New York University and president of The Society For Consumer Psychology
Walk into virtually any store (online or brick-and-mortar), and you’ll see prices ending in “9” everywhere.
We all know the theory—make the price look lower—but does it really work? Will $99 really outperform $100?
Across multiple studies, “charm prices” tend to work.
In Priceless, William Poundstone reviews eight studies showing charm prices boosted sales by an average of 24% versus nearby rounded prices.
In a joint MIT/University of Chicago test, a women’s clothing item priced at $34, $39, and $44 sold best at $39—even beating the lower $34 price.
So, can anything beat 9?
Sale prices that clearly reference the original price often outperform charm pricing in A/B tests—especially when the discount is meaningful and easy to understand.
Easy Math
Attention is scarce. Don’t make buyers do extra math. That’s why many retailers use clean, round numbers.
When a product goes on sale, smart signage shows the original and new prices in easy-to-calc terms: $10 now $8, not $7.97. Even though ‘$7.97’ is technically cheaper, ‘$10–$8’ communicates savings instantly.
Reduced Font Size
Marketing professors at Clark University and the University of Connecticut found that people perceive sale prices as better values when written in smaller fonts rather than large, bold type. Our brains connect physical magnitude with numerical magnitude.
Balance readability with psychology. Tiny fonts can harm accessibility—especially on screens. Use clear, legible type while avoiding oversized, shouty price callouts that scream “expensive.”
Key Takeaways
Pricing is more than numbers. Buyers are trying to solve problems and relieve pain points. When setting the ‘right’ price, speak directly to outcomes your audience values. A well-framed solution can outweigh the sticker price. Build around customer data and real use cases—not arbitrary figures.
- Simplify the buying experience. Avoid option overload, present 3 streamlined packages, and keep price displays easy to parse. When showing discounts or competitor comparisons, use simple math—avoid distracting decimals and commas.
- Remember that pricing is contextual. Some segments are highly price-sensitive; others prioritize time and results. Talk to customers, run surveys and interviews, and validate with experiments. Align prices and packages to the outcomes your best-fit customers care about—even if that means not serving everyone.