ASOM Pod

EP45: The Psychology of Pricing - Value vs Perception in eCommerce

May 1, 2025
In this engaging discussion, Greg Dalby, SVP eCommerce at The Woobles and a seasoned expert in the field, sheds light on the psychology of pricing. He explores why pricing strategies are rooted in consumer perception rather than just profit margins, and how premium brands like Fender balance quality and customer feedback. Anecdotes about brands like Hyundai reveal the evolution of brand perception over time. Dalby emphasizes the emotional connections consumers form with products and the necessity of smart pricing to build brand loyalty.
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INSIGHT

Balance Economic and Psychological Pricing

  • Pricing decisions often overly focus on economics, neglecting the large profit potential from smart psychological pricing adjustments.
  • Testing price elasticity can reveal surprising opportunities to raise prices without losing customers.
ANECDOTE

Aspirational Pricing at Premium Brands

  • Greg Dalby shared working at premium brands like Fender and Milk Bar shaped his view on aspirational pricing.
  • Premium pricing keeps products aspirational and builds brand prestige through storytelling and exclusivity.
ADVICE

Research Competitors for Pricing

  • Entrepreneurs should always research competitors' pricing and quality to find reasonable price steps for premium products.
  • Understand what customers value and the price jump they see as justified to maintain brand prestige.
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