What Your Brain Does When You See A Product’s Price

When we go shopping, our brains are constantly working to understand the value of the products we see. The price tag is one of the most important factors that determine how much we’ll spend on something. 

The price itself can be anything from a simple dollar sign ($100) to a complicated number with many zeros (such as $1,000,000). 

But how do our brains process numbers and price tags? What factors influence how much we’re willing to pay? And what about discounts? In this article, I’ll explore some of these questions about human decision-making when it comes to pricing and value perceptions.

Takeaways
1. Understanding the cognitive processes behind pricing perception.
2. Exploring the role of emotions in influencing buying decisions.
3. Leveraging neuromarketing techniques to optimize pricing.
4. Recognizing the impact of discounts and perceived value.
5. Importance of aligning pricing strategies with consumer psychology.

1. Prices In The Left Field Of View Are Better For Us Than Prices In The Right Field

The fact that we’re better at processing prices on the left side of the screen is because we’re right-handed, and thus have our dominant eye located on that side. 

This effect is especially pronounced when you’re looking at products with a high price tag, it seems like our brains want to avoid looking directly at them, so they try to position them where they can’t see them as much.

We tend to focus more on higher numbers than lower ones (and those in between).

When you look at an item’s price tag, it stands out more if it’s all by itself than if there’s another text around it (like a name or barcode). 

This means that we pay closer attention to that one number than any others because they stick out from all surrounding text, especially when compared against something else like a number written in red or black pen (or even printed upside down), which makes it harder for people who suffer from dyslexia or reading disabilities due to a stroke

Building effective pricing strategies involves understanding the mind tricks that our brains play to influence our spending habits. Learn about these psychological tactics in our article on Mind Tricks Employed by Your Brain to Make You Spend Money.

2. Odd-Number Prices Are Perceived As Better Value Than Even Numbers (But We Like Round Numbers, Such As $100)

The second thing your brain does is it looks at the price and compares it to other prices in your mind. And the best way you can describe this is by using one of my favorite quotes from The Simpsons, which is: “I remember when money was worth something.”

We all have a feeling in our minds about how much certain things are worth, and when we see a product’s price on a shelf or online, we compare it with other prices in our heads. 

This goes back to what I said earlier about pricing psychology that people will pay more for products if they’re convinced that they’re getting better value for their money. 

As a result, odd numbers tend to be perceived as better value than even numbers (but people like round numbers). Even numbers are perceived as more expensive than odd ones (though there’s no evidence for why). 

You can see how this might play out when shopping online or looking at the label of a bottle of wine; 

An $8 bottle of wine seems like it should cost $7 or less because 8 sounds like more than 7; but if you saw that same bottle priced at $12 instead and felt that it wasn’t worth paying any more than $9? Well then maybe you’d go with another brand!

3. We Process Prices And Discounts From Left To Right

The next time you see a product with a discount, pay attention to how your brain processes the information. If it’s on the right of the price, you’ll likely process it as a percentage off. But if it’s on the left of the price, you’ll tend to think in terms of dollars. 

Here’s why: We process prices and discounts from left to right and usually not in reverse order (sorry about that).

If there is no discount at all if it’s just an original, full-list cost you’re probably going to have trouble comparing this item with others without knowing what its regular price was. 

That is unless another retailer offers another version of this same thing for less money than this retailer’s listed one; then you have someone else’s comparison point and can more easily judge whether or not purchasing from our online shop makes sense for your wallet lifestyle needs!

Curious about the strategies behind successful online sales? Discover insights from a TEDx talk on How to Sell Products and Services Online and gain valuable tips for boosting your online business.

4. We Prefer Simple And Precise Prices To Complex And Approximate Prices

The final effect that numbers have on us is a preference for simple and exact numbers over complex and approximate ones. We tend to find precise numbers easier to remember, compare, understand, and also make comparisons with other prices of the same product.

This can be seen in another study that asked participants which was a better deal: A gallon of milk for $2 or 10 gallons of milk for $20? 

Even though you’re paying less per gallon than when buying one gallon at a time, people still felt like they were getting a better deal when buying 10 gallons at once and they were willing to pay more!

You can apply these insights to your pricing strategy by using a combination of both high-value products (like luxury items) and low-cost alternatives (like budget versions).

5. We Can Be Persuaded By Price Anchoring (For Example, A Price Of $199 Seems Low If The Price Before It Was $399 – That Is, We Anchor Ourselves To The First Price)

You may have heard of the term “price anchoring.” This is a cognitive bias where we’re persuaded by the first price that comes to mind when we see a product’s price. 

For example, if you were shopping for a new phone and saw two prices: $399 or $199 – which would you consider? 

The lower price seems much more attractive in this case even though it’s more expensive than the other one! It works because our initial reaction is anchored to what we saw first (the original higher price). 

Now that you know about this trick, be aware that it can be used against you by marketers who want to make their products look more enticing. If they want to sell more of something at $199 than at $20.

Then they’ll just increase its original retail value from 20 dollars up until it gets close enough to 200 so that customers perceive it as being discounted down from 400 dollars instead!

6. A Package Deal With A Total Cost Is More Attractive To Us Than A List Of Items With Individual Costs (People Will Pay More Overall This Way)

Did you know that people are more likely to buy something if it’s on sale? Maybe this is because they think they’re getting a deal, or maybe it’s because they’re just trying to save money. Either way, the fact remains: we love getting deals.

Here’s another tidbit: people are more willing to pay more for a package deal than for individual items (like in a grocery store). 

For example, imagine that you’re shopping at Target and see two different sets of socks one set is $5 and includes six pairs of socks; the other set contains only three pairs and costs $7. 

You might be tempted by the lower price tag here but remember that most people tend to value their time as well as their hard-earned money and would rather spend less overall by buying the larger package of socks with fewer pairs than paying extra per item while also spending more time selecting those three pairs individually!

Dive into the world of marketing with neuroimaging techniques! Explore how Neuroimaging Research Can Help You Become a Better Marketer by uncovering the brain’s responses to various marketing stimuli.

7. People Who Have Just Bought Something Are Willing To Pay More For Related Items (Television Advertisers Play On This Fact By Positioning One Product After Another)

You’ve probably seen commercials where the company shows you a product and then positions another item nearby, like a car commercial showing an SUV followed by a sedan or an electronics ad featuring a smartphone with accessories nearby. 

This technique is often effective because people who just bought something are likely to feel like they need more items from that same brand or category.

Neuromarketing techniques can be fascinating and sometimes even eerie in their effectiveness. Explore 15 intriguing examples of these methods in action in our article on 15 Terrifying Examples of Neuromarketing at Work, shedding light on the power of subconscious influences on consumer decisions.

8. People Who Have Just Bought Something Are Also More Willing To Spend More Time On Subsequent Purchases (Again, Tv Advertisers Take Advantage Of This By Placing Longer And Longer Infomercials Together)

This study followed a simple procedure: When someone came into the lab, they were given a snack bar. 

Half the participants were paid $0.25 for their time (which means the researchers knew they weren’t paying for the snack), while the other half were offered $0.50 (which means that this was considered payment for their participation). 

Then, participants watched an eight-minute clip from an hour-long documentary about chimpanzees called “Jane.” 

The researchers tracked how much each participant moved around in their seat during these eight minutes a measure of how engaged they were with what they were watching and found that those who had received more money spent more time being engaged with “Jane” than those who had received less money.

9. When A Store Discounts Its Merchandise, It Makes Us Aware That The Item Used To Cost More; In Turn, Cutting A Price Makes Us Think Twice About Buying The Product Full-Price Next Time We Visit The Store

We prefer simple and precise prices to complex and approximate prices. People who have just bought something are willing to pay more for related items (television advertisers play on this fact by positioning one product after another).

Effective marketing is rooted in understanding human behavior. Discover the profound connection between marketing and psychology in our article on Understanding Marketing is Understanding Human Beings.

Conclusion

We hope you found these insights into the way our brain works when it comes to prices to be as fascinating as we did. 

We think they’re really important to understand because they can help us make better decisions and save money! But don’t forget: The best way to do that is by sticking with what you know works for you. If something doesn’t feel right, then don’t do it!

Further Reading

Here are some additional resources to dive deeper into the topic of how our brains react to pricing and the psychology behind consumer behavior:

How Our Brains Respond to Prices Short Description: Explore a study that delves into how the human brain reacts to different price points and the implications for consumer decision-making.

This Is Your Brain on Discounts Short Description: Uncover the neurological effects of discounts on consumer behavior and how these strategies can influence purchasing decisions.

5 Psychological Studies That Will Boost Your Marketing Short Description: Discover five psychological studies with practical applications for marketers, offering insights into consumer behavior and decision-making processes.

FAQs

What are the key factors influencing consumer purchasing decisions?

Consumer purchasing decisions are influenced by a combination of factors, including price, perceived value, brand reputation, personal preferences, and emotional connections with products or services.

How does the brain respond to discounts and special offers?

When the brain encounters discounts and special offers, it often triggers a sense of reward and pleasure due to the anticipation of saving money. This can lead to increased motivation to make a purchase.

What role does psychology play in pricing strategies?

Psychology plays a significant role in pricing strategies by influencing how consumers perceive the value of products or services. Pricing techniques such as anchoring, decoy pricing, and bundling leverage cognitive biases to guide consumer decisions.

Can neuromarketing techniques effectively drive consumer behavior?

Neuromarketing techniques utilize insights from neuroscience to understand how consumers respond to marketing stimuli. By tapping into subconscious processes, these techniques can shape consumer preferences and encourage specific actions.

How can businesses create effective pricing strategies?

Businesses can create effective pricing strategies by considering factors such as production costs, market demand, competitor pricing, and consumer psychology. A thorough understanding of these elements allows businesses to set prices that resonate with their target audience while maximizing profitability.