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5 Psychological Studies on Pricing That You Absolutely MUST Read. As marketers and business owners, you will most likely come to deal with the process of pricing your products or services.

5 Psychological Studies on Pricing That You Absolutely MUST Read

The thing is, many folks struggle with this process because although they understand their customer’s needs, they aren’t experienced with what to charge people for their work. Below I’ve analyzed a few recent research studies that dive into pricing of products and services in the hope that you might better understand how to price your own goods. 1. Comparative Pricing: Not Always Optimal One of the first techniques that many marketers attempt in forming a new pricing strategy is to directly compare their price with that of a competitor. “Hey, my software is 30% less than this popular option, why not buy mine?” The problem is, comparative pricing isn’t always as reliable as marketers think it is, and can effect costumer’s perceptions of the product in a few different ways. Consider this scenario: Buying Aspirin… What do you do?

The first involved selling CDs on eBay. 2. A Look at Pay-Per-Click Tools for Small Businesses. If you need help managing your paid-search marketing efforts, consider this comparison of four options for business owners.

A Look at Pay-Per-Click Tools for Small Businesses

Managing online paid-search-term campaigns can be like water torture for a small-business owner: A slow drip of tedium, choosing keywords and deciding what to pay for each on services like Google AdWords and Microsoft adCenter. For the uninitiated, paid-search campaigns involve advertisers paying a fee, usually based on clicks or views, to have their links placed high on search-engine results pages. They typically bid on keywords or keyword phrases. Users can find themselves guessing at the words those searching for your products or services might enter into Google, Bing, Yahoo or other search engine. All for the prospect of having your short bit of linked copy appear across the top and on the right side of a web-search results page. Related: Pay-Per-Click Return on Investment Calculator Our take? ClickSweeper Why you might like it: It’s flexible. WordStream for PPC. Five Signs It's Time to Change Your Prices. Are your prices driving away customers or creating unrealistic demand?

Five Signs It's Time to Change Your Prices

You may be making one or more of these common mistakes. Here's how to turn it around. Pricing your products right is a key to success for any small-business owner. But coming up with the right pricing structure can be tricky business. Charging too much can turn customers away, while pricing too low can create demand that your business can't possibly meet. 1. Related: How Pricing Can Power a Turnaround 2. 3. Related: How to Raise and Lower Your Prices 4. 5. Related: The Dark Side of Discounts Lisa Girard is a freelance writer who covers topics as diverse as golf fashion, health and beauty, the hardware industry and small business interests.

The Dark Side of Discounts. Why sales and discounts can cause damage and how to offer breaks without devaluing your products.

The Dark Side of Discounts

If you're the type of person who shops only sale prices, think about this: Would you want you as a customer in your own business? When I was growing up, my entrepreneurial family wasn't motivated by sales. I was taught to not get excited about sale prices because nine times out of 10, you can always buy the item for that price. This has been a good lesson: Sale prices are often nothing more that statements of what you should really be paying for something. And that is the downside to discounts: They can destroy price integrity with blinding speed. That's why business owners should have an uneasy relationship with discounts. Related: The Downside of Social Coupons Consider: Is price your only competitive advantage?

To maintain higher prices, you have to instead be adept at selling value. Related: When a Groupon Promotion Went Wrong There are upsides to offering discounts. Prepay discounts.