Price Impacts Perceived Value

The common rule is: “The higher the quality, the higher the price”. Yet it works backward as well.

In the experiment of German neuro-economist Hilke Plassman, participants drank identical wine with different price tags: 10$ and 80$. As the result, the expensive wine “tastes” much better!
In short:

  1. Price normally triggers the pain area in the brain.
  2. It is also a signal to evaluate product quality.
  3. High price increases subjective quality.

Therefore, if you want to grow sales (or sell out remaining goods), increase price.

Be cautious: it works only if the product has a wide range of price (e.g. wine). It will fail with deodorants and shampoos. What helps: a cool design, a great story, and exclusive access to the product.

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