Discover The Reason Why Clients Treat Your Offers Terribly
The Price-Quality Paradox
Have you ever heard of the price-quality paradox in neuromarketing?
You’ll likely find this concept intriguing.
Customers derive various forms of value from their transactions, much of which is subjective.
One of the primary factors influencing this value is the price.
In essence, price serves as a crucial determinant for both consumers and companies when assessing the worth of a transaction.
The price paradox belief is that when you lower the price, more people will buy your service or product.
But that can not be farther from the truth because,
Price has different effects on people, for example
1. Social Status
Some customers perceive high prices as conferring psychological value, such as social status.
For example, paying $1 million for a 30-second Super Bowl ad.
instead of investing $1 million for a social media 3 months- 6 months campaign/ad.
The super bowl spend might give your company, brand or agency some sort of social recognition
2. Negotiation Prowess
Others find the act of securing a good deal or negotiating enhances the perceived monetary value of a product.
For instance, convincing you to sell them a product for $10,500 instead of $13,000 makes some customers feel better even if the product could have been bought at $9,000 without delayed negotiations.
3. High Price = High Quality
Some customers automatically associate high prices with superior quality.
For instance,
assuming that a freelancer charging $25 per hour for SEO service provides higher-quality services than one charging $3 per hour.
In summary, whether you’re a freelancer, agency, or business owner, the price you set for your product or service can lead people to question its quality.
Supporting Data
In one of the most influential studies in neuromarketing, Plassman et al. (2008) investigated the neural activity of twenty subjects while they sampled five wines.
These subjects had only the retail price of each wine as information.
The participants/subjects were asked to rate the pleasantness of each wine.
Unbeknownst to them, the five wine samples consisted of only three different wines, with two of them tested at both high and low prices (e.g., Wine 1 was presented at both $90 and $10).
Besides studying behavioural measures, the study revealed a strong correlation between reported pleasantness and price.
Many subjects found the cheap wine with a high price to taste pleasant but always expressed disgust at the cheaply priced wine.
In Conclusion
Although you’re seeking more clients as a business, agency or freelancer, what really sets you apart is not lowering your price, reducing your price can actually cause more damage instead of helping your situation
One of the key methods I use for convincing clients is “My Process” and I’ll share more details about this, in the next newsletter!
Cheers!
More to Love
1. The Scarcity Paradox
This is the tendency to reduce the perceived value of something that is readily available or easily obtained
This psychological concept suggests that people tend to place higher value on items or services that are scarce or in limited supply, as opposed to those that are abundant or readily accessible.
In a nutshell, you have to try to raise your value and most importantly price as a long-term product seller (such as a subscription product) or a contract-based service seller or employee.