5 Psychological Mind Tricks to Make Customers Spend More Money
Updated: Sep 27, 2019
Have you ever wondered what makes a person "magically" inclined to spend more?
You tried to upsell to your potential customers “your greatest ever” products on earth, hoping to earn more revenue only to realise that your potential customers shun away from you instead.
On the other hand, your competitors somehow seems to have an easier time collecting additional revenues and profits though upsell as well.
Then you tried to copy your competitors product and you tried to sell at a even lower price than your competitors but you just can't rack in the numbers!
So in the end, you just resigned to the fact that the other seller was lucky and how you wish that you are the lucky one instead.
The truth is, I was in this kind of situation a few years ago.
Majority will assume that customers buy products and services because the price is lower as compared to other seller.
Well, it may be true that buyers would usually go for the cheaper option but that is just a scratch on the surface!
During the last few years, I discovered that there is actually a psychological effect behind that will influence a buyer's buying decision.
In this article, I'm going to reveal five proven mind tricks that stores are using on you every day. And how you can use them to your advantage by applying these exact same methods to your own store.
Some of these tricks can be applied to get new customers, while some can be used to get customers to spend more money.
The best part is, these tricks can be used immediately to increase your sales, boost your conversion rates, or simply win over more customers.
Note: While I'm writing this article in the context of an e-commerce business, do note that these methods can also be applied to brick-and-mortar business as these tricks are universal and proven to work.
Trick #1: The Price Anchoring Trick
You go to a restaurant, you saw a bottle of wine that cost $999.
So the first thing that comes into your mind is, “Who would even buy that?” you might ask. And you’re absolutely right: Nobody!
So why is the bottle on the menu? Well, the truth is no one is actually buying the wine. It’s just there for show…
Then you will be presented with another bottle of wine, similar brand and taste as the $999, only difference is a few years younger, BUT at a cost of $199.
So in this case, you’ll probably think that the $199 wine offers the best value because you’re paying $800 less for a few years difference.
Well, that thought process is exactly what the restaurant owner intended for you to do. They wanted the $999 wine to be an anchor so the $199 wine looked like a bargain in comparison.
It's a human tendency to perceive a purchase price like this, our cognitive bias is always veered towards the best reward for the least money/effort.
This is called price anchoring. It’s a sneaky trick that menu engineers use, and has a powerful influence on your purchasing decision.
Apply this trick to your store by adding premium priced products to your store, even if you don’t expect people to buy them. This makes your other products appear cheaper in comparison, so people are more likely to perceive lower priced items as a "bargain".
Trick #2: The Coupon Trick
As a digital marketer, I hate to say or admit this. Nowadays, people are getting smarter and skeptical about advertisements.
According to a study by Forbes, 97% of millennials read online reviews before selecting a business, and 89% trust those reviews. And a recent study found eight out of 10 millennials never buy anything without first reading a review.
Let's be realistic, do you ever purchase a product without reading the product review from other users?
This creates a "chicken-and-egg" situation for stores. Because in order to bring new customers in, a business needs reviews.
….But to get those reviews, they need customers to come in first!
So how do stores overcome this challenge? Coupons!
Not only do they help customers overcome their initial doubt, but studies has shown that coupons can trick us into feeling that we are getting a better deal, by affecting the chemical balance in our brain.
So how can you implement this? The answer is simple. Create a 1 off coupon code, then add a popup to your store that offers it to new customers (in exchange for their email address).
Remember, it does not have to simply limit to new customers. This can even apply to your past customers who have bought from you by doing a re-targeting or email blast. In fact, it is 4x easier to generate a sale from your past existing customers than a new customer.
Trick #3: The Buy 1 Get 1 (BOGO) Trick
This is a proven trick to get customers win over more customers.
Remember the age old, Buy 1 Get 1 Free Offer? Yes, that is a very classic offer which is pretty straightforward. You buy one, you get one free. That works out to a 50% off if you average it out.
Now, I will teach you how to play around with the "Buy 1 Get 1".
The concept of "Buy 1 Get 1" can come in a variety of offers. From "Buy 1 Get 1 Free" to "Buy 1 get 1 50%" off. But no matter the variety, they all do one thing very well — they drive sales.
Like many offers, it is the perception that is most important, not the reality.
In fact, the reality is if you do a Buy 1 Get 1 50% off, it is essentially the same as 25% off your entire purchase for the customer, but it feels like so much more. That's because the 50% feels more than the 25%.
The perception for the customer is that they are getting a big deal. And that is what matters. "Buy 1 Get 1" is one of the best "perception" offers you can use.
Better yet, try combo this with a limited time coupon. And see the results.
Trick #4: The Same Percentage (%) Trick
One reason most of us are quite easily tricked into is because we are really quite bad at math in general.
For example, you go to a supermarket and you saw two packs of milk powder of a same price.
Pack A is going at 30% discount. Pack B comes with 30% extra milk powder.
At first glance, it may seems that both packs are offering as an equally great deal even though in reality, Pack A was the better deal.
Alright, so let's do the math.
Assuming that a 100g bag of milk powder normally cost $10. We apply a 30% discount, so it now costs $7. That means that each gram of milk powder now costs just 7 cents.
Now let’s take that same original bag of milk powder, but this time we increase its volume up by 30%, so now it costs $10 for 130g of milk powder. When you do the math, a gram of milk powder will now cost approximately 7.7 cents.
Because the same discount number (30%) is applied to both offers, your brain will automatically assumes that a 30% increase or decrease is the same thing. In fact, you probably thought it was at first!
Unless you are willing to go through the hassle by doing the math on the spot before you buy, chances are; you usually would be too lazy to even bother. That's the another reason why usually things like this that are easy to trick people into thinking they are getting a better deal, but in reality no.
Trick #5: Prestige Pricing Trick
This trick usually applies for premium luxury brands such as Burberry, Gucci, Prada, Apple, Louis Vuitton etc. It may not be applicable for dropshipping beginners stores most of the time, but it will be good for you to know.
For example, you go to Louis Vuitton and you will realized that all of their products are priced in whole numbers ($850) instead of decimal numbers ($849.99).
This is what we called, Prestige Pricing. This is a pricing strategy where companies price their products to create the appearance of higher quality.
This style of pricing is common with designer brands such as Burberry, Gucci and Prada. And the reason is because people who buy from them do it out of feeling and, rather than strategic choice.
This concept is based on the assumption that the customer will pay higher prices for the right brand, and actually they will not research whether the price reflects the value or not.
Basically in short, if you frequently shop on luxury goods such as Rolex, Louis Vuitton etc, you will realised that you will not really compare their prices alongside with other products or luxury brand for that matter.
Keep in mind though that this type of pricing works best with high-end stores, and less so for small dropshipping stores.
Even though I would recommend you NOT to use this strategy, and stick to decimal pricing instead, if you would want to try out prestige pricing on your dropshipping store, there are a few situations where you can implement.
1. When you’re first launching your store or product.
2. If your product is unique and there is no substitute.
3. If there is a limit to how many products you produce.
Bear in mind that if you are going ahead with this kind of strategy, you are essentially branding yourself up to a premium brand, the result is you’ll have a limited customer base.
There’s several ways our brain is tricked into spending more than we should.
Now that you have learnt a few tricks, now you can use them to your advantage by implementing them in your own store.
Even using one trick alone can drastically boost your sales and conversion rates. Whether it is a coupon or discount, or pricing a few items absurdly high, these methods are proven to largely impact people’s purchasing decision. And yes, they don’t cost you a single cent!