The Psychology Behind Pricing in Business

Setting your prices for products or services you offer can be a daunting task. Companies such as tow truck annandale va have to undertake a lot of research, to settle on a pricing strategy that is best for customers. One of the most applied methods when it comes to pricing is psychological pricing. It involves a collection of methods that are structured around how consumers mentally perceive price points and values. It is a process that takes those trends and tendencies into account and poses a creative way to the playoff and exploits what is on the table.

Psychological Pricing

Psychological pricing is a method that rests on the idea that different kinds of prices prompt different psychological responses. You can see items offered at $1.99 instead of $2.00 because people perceive odd prices being slightly less than round numbers. However, it has to be noted that psychological pricing strategies are essentially complex. When you see a burger retailing at $0.99 at your local store, it triggers an instant psychological response. The same is the case when you see at your favorite cloth store, an offer that buys one and gets one free. There is a diverse array of psychological pricing strategies and here are some of them.

Bracketing

Bracketing is a psychological pricing strategy that is meant to sway buyers into choosing an option at a specific price. With this strategy, you normally have multiple products with different attributes that are available at varying price points. However, with all of these options, there is a single product you want most buyers to choose. To lead buyers into your preferred product, you offer three choices. A lower-quality option, your preferred median option, and a premium option. The key here is to offer your lower option at a bargain and a premium option at a higher price point. The logic is based on extreme aversion, which is the human tendency of avoiding extreme options in favor of intermediate ones.

Decoy Pricing

Decoy pricing is based on the fact that consumers will generally change their preferences between two options when given a third option that asymmetrically supports one of the initial two. Let’s dissect this together. Let’s assume there are two size options for buckets of popcorns. A small option goes for $3 while a large one goes for $7. This means a disappropriate amount of consumers will favor the small option because it appears to be the better deal. However, if you were to introduce a medium price for $6.5, then the $7 suddenly becomes the most favorable. Consumers will eventually choose the larger bucket because they think they are getting a substantial upgrade for just $0.50. In this case, the medium option will be considered a decoy.

Innumeracy

The innumeracy strategy is often applied in retail. Let’s assume you are offered two deals. With one deal, it’s a buy one get one free, and another deal which has “two items 50 % off”. Which of these two deals sounds like a more viable option? If you are like most consumers, you would most probably choose the first, even if the two pose the same value. This trend forms the basis of psychological pricing strategy known as innumeracy. It is based on consumers’ lack of motivation, inclination, and ability to apply fundamental maths principles every day. 

Why You Need Customer Service Support Managers

Customer service and support employees commonly referred to as representatives and managers, support towing service and other businesses to ensure customers have a positive experience with a brand. They do this by answering customer inquiries, resolving problems, and addressing concerns so that customers can continue doing business with you. Let’s us have a deeper understanding of what these people do and the task they are mandated with on their desk.

Customer service and support managers

Customer service and support managers lead, coach, and train representatives. They provide their reps with goals and feedback to help them improve on their services and the support they provide their customers. They can step in and assist a representative in any given situation on a challenge they are facing with a customer. Managers also communicate with their representatives to ensure all expectations of the department are met.

Customer service and support departments are very critical for the success of any business. Since customer service and support managers dictate the way representatives communicate with and assist customers, it is very important to come up with a plan in place on how o train and develop quality managers for your company.

Customer Service Managers

Customer service managers work proactively by leading their representatives to solve customer problems before they even realize they exist. To do this, these managers organize their reps in teams based on the function to be handled. They determine the channels reps should be working on, be it email, phone, and chat, and work to create collaborations with other stakeholders. Customer service managers oversee the teams of customer service reps and will only have time to speak with the customer directly if the rep escalates an issue.

Customer Support Managers

Customer support managers work reactively by leading representatives to resolve customer inquiries via different methods and modes of communication such as phone, social media, email, and chat. Support representatives are typically the first point of contact your customer will have with your company’s customer service team. Customer support managers oversee teams of customer support reps and similar to customer service managers, they will typically only speak directly with the customer if a rep escalates an issue.

There are several sets of skills required to become a successful customer service manager. These managers oversee teams of representatives who respond to inquiries and resolve any issue a customer may have. They are good motivators and lead their teams of reps. In most times, they remain patient in all customer-facing scenarios and know company products in and out.

They are great communicators in that they must be able to communicate with their reps to ensure all customers are well taken care of in a professional manner that meets the company’s standard. They have a high level of patience. They are always patient while teaching their reps how to reach different resolutions for their customers.

They are good problem solvers. They have to find a way to resolve every customer issue and answer different inquiries every day in the most efficient manner.

Small Business Planning Tips to Your End Year

There is still time left before 2020 wraps up and planning is always key to getting everything right. If you are running a business such as https://wpbtowingservice.com/, you know the importance of allocating resources to the right places and setting everything according to plan. 2020 might not have turned out according to the expectations of many. However, better days are always ahead, and here are some tips on how to plan for what’s ahead.

Work on your bookkeeping

You will not be able to make any sound financial or tax plan if you don’t have a good grasp of your bookkeeping. You need to have a solid understanding of what you have taken in and how much you are spending. If you are not a certified accountant, there are different apps you can use to automate bookkeeping recording of all your transactions. You need to have a good understanding of how your expenses are.

Revisit your pricing

Once you have an understanding of the financial health of your business, you need to evaluate the sustainability of your business, in terms of pricing. Many business owners make the mistake of undercharging their customers and you may set a price that compromises the sustainability of your business. The pricing you set should adequately compensate for your time, expenses, and all costs. The start of the year presents a wonderful tome to rework on your pricing strategy.

Do end-year tax planning

Many people normally think that taxes happen only once a year. As a result, they lose the chance to make any meaningful changes that could help planning their taxes. It is important to set up a meeting with an accountant before the year comes to a close. Their advice would be very important in getting things going in the right manner. All books of account should be properly balanced.

Reflect on your business structure

You might have been thinking of upgrading your business structure from a sole proprietorship to a limited liability company or a corporation. It is now the best time to implement the change. You will be in a position to restructure your taxes when you change your business structure. You only need to consult your legal team for paperwork.

Revamp your website

You may need to update your website and work on your social media profiles. Take time to work on the content that educates your customers on your products and adds value to their lives. Ensure the content on your website and social media pages are up to date. Dedicate enough time to rework and revamp your website with a new look.

When running a business, it will take a huge chunk on your time and other resources. You may find yourself with a lot of distractions on your side. You might even have other side businesses that eat into your time and profits. It is important to be fully dedicated and also close any inactive businesses taking away your time. Have a solid plan for your schedule and establish a routine.