For many of us the last thing that we look at when choosing an affiliate program is the cost of the actual product or service to the surfer however, as you will discover in this brief article, the price point of any given product or service should be one of the first thing you take into consideration.

What Is A Price Point?

Price Points are the costs of an individual item not only to a wholesaler but also to the end consumer, for example, a paysite memberships price point may range anywhere from $14.95 - $39.95 for a month access. The price point for many products you can purchase both on and offline also have several methods of being calculated ranging from market tolerance for an existing product right the way through to the psychology of what an end consumer will pay for any given item.

Psychological Pricing - What Is It?

Psychological pricing is a term used by marketers to describe the effect that specific prices have a psychological effect on a consumer that drives the demand for any given product or services to a greater level than is a specific demographic of end user was thinking in a rational manner. In other word, a price that can actually sell an item despite knowing anything more than the basics of the product itself.

The Theory Behind Psychological Pricing.

Psychological pricing has been around for many years, in fact, it even has its own set of theories as to why specific types of price points tend to work better over another, the main theories for psychological pricing are as follows..

1) Consumers, for the most part tend to ignore the less important numbers of a price point so for example, even though the 'cents' part of a price are seen, whilst not always true, subconsciously they may be partially ignored so, if you see a product priced at $19.99, you would be more likely to round the cost of that product up to an even $20.

2) Prices that contain 'cents' on them appear to be a lower cost to consumer than if you used a price that consisted of purely a whole number.

3) Because psychological pricing has been around for so long, walking into a store that sold everything for exact whole numbers would appear strange.

In essence, the theories surrounding price point psychology all revolve around how the end customer will 'feel' either consciously or, subconsciously when considering buying any individual or group of items.

Price Points In Practice.

No matter where you go to buy anything, local grocery store, gas station or cinema, you will inevitably notice that the costs of items always appear to end with either a .99, .97 or .95 price point. The reason for this is that studies conducted in the past noted that by not rounding off the cost of item, it subconsciously tells the consumer that is a 'better deal' for them. In fact, studies carried out by several mail order companies noted that in some instances, products that had a price point ending with the .95 cost increased their sales up to 35% overall.

Pricing And Psychology - Recap.

As you have hopefully learnt from this brief article, the cost of a product, even by a few cents can significantly influence many consumers into purchasing a product or, in our case, a membership, by ensuring that we carefully select which price points we offer our surfers we could potentially increase not only our sales ratios but more importantly, our bottom line profits. The next time you sign up for a new affiliate program, take a look at the costs for their memberships to the surfer and ask yourself, are they using Psychology to make the surfer join?

Article written by Lee.

http://www.studmoney.com