How to Communicate Your Price and Deal with Discounts

You need to be aware that there are basically 2 strategies to sell. One strategy is to be the least expensive offer of the service, and the other thing is to be an expensive offer of the service. What is the effect of charging a low amount or a high amount of money? Well, people are looking for indirect clues everywhere, and the price of a service is a clue to them. People will expect that you are better if you cost a lot of money.

Cognitive Dissonance

There is an effect called cognitive dissonance. It means that people really like to be in line with how they thought before and what their decision they took. Imagine You buy a new TV for 500 dollars, and a week later you see that same TV for 400 dollars in a different store. It’s a bit of a problem because you just spent 100 dollars too much. What you do is you find a cognition around the situation to deal with that problem.

Cognition in Doing a Discount

The way to do that is by inventing a cognition that buffers that bad feeling. That might be the cognition of “where I bought it now at the shop, I get a better service” or, “I like the people there, and I would like to support the salary, so it’s okay I bought it there.”

Charging a high hourly rate increases the perceived quality of your work

If you do a discount, I suggest that you do not work on the price. Keep the high hourly price, but put in more hours. If you put in 10 hours but you declare only 5, it will seem as if your work is excellent, and people want to spend more money on excellent work. But if your work isn’t excellent, then people are often weary to pay a price, no matter how low it is. From a psychological perspective, you’re better off taking some more money and then not declaring all the hours. That will bring you the most effect in the end.

Take home message: Use psychology to increase the perceived quality of your work, but charging a high hourly rate.

Cognitive Dissonance

There is an effect called cognitive dissonance. It means that people really like to be in line with how they thought before and what their decision they took. Imagine You buy a new TV for 500 dollars, and a week later you see that same TV for 400 dollars in a different store. It’s a bit of a problem because you just spent 100 dollars too much. What you do is you find a cognition around the situation to deal with that problem.

Cognition in Doing a Discount

The way to do that is by inventing a cognition that buffers that bad feeling. That might be the cognition of “where I bought it now at the shop, I get a better service” or, “I like the people there, and I would like to support the salary, so it’s okay I bought it there.”

Charging a high hourly rate increases the perceived quality of your work

If you do a discount, I suggest that you do not work on the price. Keep the high hourly price, but put in more hours. If you put in 10 hours but you declare only 5, it will seem as if your work is excellent, and people want to spend more money on excellent work. But if your work isn’t excellent, then people are often weary to pay a price, no matter how low it is. From a psychological perspective, you’re better off taking some more money and then not declaring all the hours. That will bring you the most effect in the end.

Take home message: Use psychology to increase the perceived quality of your work, but charging a high hourly rate.

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