Retail Pricing Psychology

Everyone thought FERRERO ROCHER would FAIL to sell ₹300 Rs chocolate in India where the most expensive chocolate cost ₹25.  In 2004, India's GDP per Capita was $624. (₹52,000 as per today's US-INR rates) What's worse is that as per NITI Aayog, in 2005, 55% of our population was multi-dimensionally POOR.  Now tell me: How could anyone spend money on CHOCOLATES when even feeding your child 3 times a day was hard? ➡️ To worsen things for Ferrero Rocher, the Indian market was full of affordable brands like Mondelez (Cadbury), Nestle, and other small players.  Then how did Ferrero Rocher manage to CREATE a new segment, and then DOMINATE it? Let's start with their positioning.  ➡️ Instead of targeting the bottom 95% of Indians, they targeted the top 5%.  This allowed them to DIFFERENTIATE themselves from the other's, and break free of the PRICE WAR. Then? They focused entirely on GIFTING. ➡️ Although Indians might be cost-sensitive when it comes to gifting (especially to relatives) - we become luxurious SPENDERS. So how did it manage to become the preferred brand for GIFTING? 1. Extra Price 2. Scarcity 3. Packaging and Feel 1️⃣ Extra Price In 2004, when they launched their first ever Ferrero Rocher, it cost ₹300 for a 12-piece box. That was DOUBLE the price of Cadbury Celebrations available then. Why? By then, Chocolate had become mainstream. Little ₹1 rupee chocolates became 'chillar' for us. And you couldn't gift 'chillar' to people, can you? 2️⃣ Scarcity As per a report in JRFM, Ferrero Rocher deliberately disallowed shops from having more than 2-3 Ferrero rocher boxes at a time. Why? Because scarcity drives demand. 3️⃣ Hazelnut Hazelnut is not very well known in India. It's too expensive and scarce. This became Ferrero Rocher's USP. Unlike other chocolates with the same 'milk and dark colour', Hazelnut gave Ferrero Rocher that 'premium feel'. 4️⃣ Packaging Unlike commercial brands, which try to REDUCE their cost of packaging, Ferrero did the OPPOSITE. They spent on packaging because it gave them: 1. Premiumness, and 2. Feel that it is perfect for gifting. --- Did you notice one thing? All of their strategies are designed to make them more 'premium' Because what I learned from them, is that ➡️ In today's era of mass production: Prmeiumness is what sells. So what do YOU learn from them?

Should you lower your price? Should you charge more? Here's how to find out. Most companies are leaving money on the table, especially in B2B. When businesses aren’t buying, price is almost never the blocker. Companies can always find room in their budget 𝘪𝘧 𝘵𝘩𝘦𝘺 𝘴𝘦𝘦 𝘷𝘢𝘭𝘶𝘦. Typically, the real blockers are operational or political issues, such as: • Stakeholder buy-in • Fear the product may not work as expected • Buyers worry they lack the expertise to choose the right product • Process changes needed to adopt your product • Switching costs like migrating data or staff re-training • Lack of engineering or IT resources for integration • The risk of embarrassing your buyer in front of their boss (“nobody ever got fired for buying IBM”) 𝗦𝗶𝗺𝗽𝗹𝗲 𝗻𝗲𝘅𝘁 𝘀𝘁𝗲𝗽 To understand the true (non-financial) cost of your product, interview 5 new customers and ask them what internal hurdles they had to overcome in order to adopt your product. Here are some questions you can use: • How long did it take from the time you made the decision until you were up and running? • Why did it take that long? Could you walk me through the steps? • Which budget did it come out of? • Who actually did the implementation? • What measurable outcomes does this product impact? Which KPIs? • Whose bonus depended on those KPIs being hit? • If you didn’t achieve that goal, what would that mean for the business? Once you have these answers, find ways to address your blockers instead of lowering your price. Remember, a low price signals poor quality. If prospects already have doubts, price cuts will only make them worse. Helpful? Feel free to re-share with your audience too.

One of the biggest reasons deals stall isn’t that buyers doubt your solution—it’s that they doubt their ability to make the right choice. Matt Dixon's research for The JOLT Effect found that 40% of lost deals are driven by customer indecision, not preference for a competitor. And Brent Adamson's new book The Framemaking Sale highlights that customers with high decision confidence are TEN TIMES more likely to make a purchase. Here are a few ways you can help buyers build confidence in themselves: 1. Reduce Decision Complexity According to Gartner, 77% of B2B buyers report their last purchase was “very complex or difficult." Streamlining options, providing decision guides, or recommending a clear best-fit reduces “analysis paralysis” and gives buyers confidence they aren’t missing something. 2. Reframe Risk in Personal Terms Buyers often fear personal blame more than organizational failure. Use case studies and peer validation to show how people in their role succeeded—helping them feel safe and supported in their choice. 3. Provide Buyer Enablement Tools Tools like ROI calculators, pre-built board decks, or checklists reduce the burden on them and demonstrate that they have what they need to decide. 4. Normalize Their Concerns The JOLT Effect also emphasizes “normalizing indecision” as a critical skill—buyers need to know hesitation is common and that you can guide them through it. Framing uncertainty as a normal step in the process reduces the shame that often delays action. 5. Signal Post-Decision Support Harvard Business Review highlights that buyers who see strong post-sale support are more confident in making initial commitments. Show them the path forward—onboarding, customer success, peer communities—so they know they won’t be left alone after purchase. Helping buyers feel personally confident and protected is as important as proving your product’s value. The most successful marketers and sellers don’t just build confidence in the solution—they build confidence in the decision-maker.

10 years ago, while working at LVMH, I noticed one consumer trend that surprised me. At the time, LVMH ran the duty-free in Mumbai through a company called DFS Group Limited. In the stores, Indian customers would skip luxury perfumes and watches to pick up British Dairy Milk. It was one of the top-selling SKUs. Honestly, I thought it was due to a colonial hangover—the belief that British Dairy Milk was better than what we got in our kirana stores. But it was something else. The answer reveals how global brands evolve and cater their offering for India. When Cadbury UK entered the Indian market, they faced a unique challenge: unlike the UK, we didn't have an advanced cold chain. Our climate demanded more stabilizers, different packaging (the foil around the chocolate isn’t there across the world), and a different price point. So they adapted—different ingredients, different texture, different taste. And they made a chocolate that could survive Indian summers and fit Indian wallets. This worked until Indians who traveled abroad started noticing the difference. British Dairy Milk became that 'luxury' chocolate you'd bring back from duty-free. That’s when Cadbury saw an opportunity. They launched Dairy Milk Silk—richer, creamier, closer to the British version, and priced at a 50-70% premium. Everyone said it wouldn’t work. "Indians are too price-sensitive." But it did—and became a massive hit! Today, Dairy Milk leads India's confectionery market with over $800M in sales, and Silk's premium pricing hasn't stopped its growth. It’s just increased their market share. This shows how global brands carve their place in the Indian market: Start with an adapted, contextual product → Build trust and customer love → Go to the premium segment It’s fascinating to see how yesterday’s luxury becomes today’s basic—and today’s basic becomes tomorrow’s obsolete. Which other product have you seen this with? #India #Chocolate #Marketing #fmcg

Charging less isn’t the answer to attracting more clients. If you’re not converting, the issue likely isn’t with your pricing—it’s with your messaging. When we lower prices, hoping that a “low-ticket” offer will magically fix things, we miss the real issue. Even a “bargain” offer can’t sell if the message isn’t landing. Here’s the reality: → Price cuts can’t fix unclear messaging. If your ideal clients aren’t resonating, they won’t convert—no matter the cost.  → Low-ticket offers aren’t a silver bullet. Lowering prices won’t help if your audience still doesn’t understand why they need what you’re offering. What we need to do is build a powerful message that speaks directly to the heart of our ideal clients. Here’s how: 🔹 Make your value undeniable. Clients don’t invest because of a deal; they invest because they see life-changing potential. 🔹 Speak directly to their needs. Talk about the transformation they crave, not just the features of your service. 🔹 Refine and simplify your offer. When your messaging is clear and impactful, clients can feel the value. Price is only a barrier when the message doesn’t resonate. Get that right, and pricing becomes secondary. The solution isn’t a low-ticket offer; it’s a compelling message. Do you agree?

"Let me get back to you." Sounds polite, right? But 90% of the time, it’s a soft NO. Because if they really wanted to work with you, they wouldn’t need to "get back." So, what do you do? Do you sit back and wait? Do you follow up and get ghosted? Do you lower your price to make it more ‘convincing’? No. You take control of the sale. Here’s how I handle this—without sounding desperate, pushy, or manipulative: 1. I validate their process. Wrong: "Take your time!" (This keeps me in limbo.) Right: "That makes sense! Choosing the right partner is important. Can I ask—what are you specifically looking for in a provider?" Why? Because now I’ve shifted the conversation. Instead of waiting, I’m uncovering what’s holding them back. 2. I address hidden doubts head-on. Most people don’t just ‘get back.’ They’re hesitating for a reason. Maybe it’s price. Maybe it’s trust. Maybe they don’t see the urgency. So I ask: "Totally understand! Usually, when someone says this, they have a concern they haven’t shared yet. Would love to hear your thoughts- so even if we don’t work together, I can improve how I do things." This does two things: It makes them comfortable sharing their real reason. It positions me as someone who genuinely wants to help, not just close a deal. 3. I create FOMO the right way. Instead of saying, "I only have limited spots left!" (which sounds salesy), I make them realize the cost of waiting: "Most of my clients regret one thing—waiting too long. Every month you delay, you're leaving [insert pain point] unresolved. Curious—if you were to move forward today, what’s stopping you?" This makes them think about the real cost of delaying. 4️⃣ I give them an easy way to say YES. Sometimes, the hesitation is just decision fatigue. So I simplify it: "I get that you're talking to others—so to make this easier, why don’t we do a quick 20-min strategy session? No commitment, just clarity. If it feels right, great. If not, no pressure." Now, instead of a vague “I’ll get back to you”, they have a clear next step. And guess what? 7 out of 10 times, they take it. Because people want clarity. They want certainty. The truth? Your prospects don’t need more time. They need more confidence in choosing YOU.

You just pitched a $3,000/month retainer to a prospect. They say: "I love it... but that seems expensive." And you panic. You immediately start justifying the price. Or worse—you offer to come down. Sound familiar? I've watched 200+ fractional EAs struggle to overcome price objections. Here's why potential clients are pushing back: The EA space has been commoditized. - $7/hour VAs on Upwork - Freelancers racing to the bottom - AI tools claiming they can replace you It's a buyers market and most assistants are competing on price. So when a prospect hears $3K, they default to comparison mode. But they're not comparing apples to apples. When they say "gee, that seems expensive," they're rarely talking about price. They're talking about uncertainty. They're uncertain you can solve their problem. They're uncertain of the value you provide. They're uncertain about moving forward. To remove uncertainty: 🛑 DON'T say: "We can give you a discount" "What budget did you have in mind?" "Let me explain why it costs this much" ✅ DO say: "Expensive compared to what?" (Make them clarify; then you compare apples -the competition- to oranges -your specific support) "Price aside—are you 100% confident this would get you to your goal?" "If the time savings of this investment generated an extra $300K+ in revenue this year, would $3K/month still feel expensive?" Pricing objections aren't about cost. They're about uncertainty. Your job isn't to defend your price. Your job is to shine a light on the perceived value of what solving their problem is worth. Agree?

Most off-plan buyers don’t say no because of price. They say no because... ...they can’t 𝘧𝘦𝘦𝘭 it. Real estate developers like to think purchase decisions are rational. So they bombard buyers with: PDFs. Brochures. Prices. Floorplans. Renders. But humans are not robots. Not yet, at least. Emotion is what influences decisions. And the type of emotion shapes the outcome. → If I’m excited or happy, I decide faster and take more risks → If I’m scared, I hesitate, delay, or don’t decide at all Now, here’s the punchline: Research shows immersive experiences like VR double emotional responses compared to 2D content. This matters if you're in the business of selling off-plan projects. Because when you amplify positive emotion, you reduce doubt. And when doubt goes down, clarity and confidence go up. That’s when your buyers say: “I picture myself living here. I want this.” If you're a real estate developer in the GCC trying to: ▪️ Help buyers visualize what doesn’t exist yet ▪️ Shorten sales cycles ▪️ Stand out at launch events and in showrooms Then this should matter to you too. When was the last time you built an experience that made people feel something unique? Because when they feel it, they believe it.

[I’ll never buy another Range Rover] OK a few years ago someone remotely disabled my Wi-Fi so my Ring doorbell, disconnected the £5000 tracker within 200m and took off in my Range Rover. I now know Range Rovers are the most stolen to demand cars out there and frankly the stress of not knowing it’ll be there the next morning isn’t worth the drama… … but that isn’t why I’ll never buy another one. I drive a Tesla now but doubt I’ll ever go full on lux again. *No shade on those that do - but for me, it’s just not worth it. Here’s why: The Real Flex is Freedom, Not Possessions When I first got my Range Rover, I felt validated, proud, and satisfied. It was a tangible symbol of my hard work and success. But true success isn’t measured by what you own; it’s measured by the freedom you have to make choices that align with your values and passions. Whether it’s taking time off to travel, spending more time with family, or having the flexibility to pivot your business, freedom is the ultimate flex. Lesson: prioritise investments that buy you freedom and flexibility over those that simply boost your status or your ego … 2. The Dopamine Impact is Short-Lived The thrill of buying a new Range Rover was great, but it didn’t last long. It soon became just another car. This fleeting nature of material happiness is a stark reminder of the limited joy that possessions can bring. Happiness derived from material purchases is transient. This phenomenon is known as the "hedonic treadmill," where people rapidly return to a baseline level of happiness regardless of their recent experiences or purchases. In contrast, investing in experiences provides far more enduring happiness. Lesson: Prioritise experiences over possessions. They bring lasting happiness and meaningful connections. 3. True Success is Building Something That Outlasts You Driving my Range Rover might have made me feel successful in the moment, but it didn’t contribute to my long-term legacy.. True success lies in building something that outlasts you. This could be a company that continues to thrive after you’ve stepped away, a product that changes lives, or a mentorship that empowers future generations. Lesson: Strive to build a lasting legacy. Create something that will outlast you and add real value to the world. What’s your flex? Freedom? Or something else?

People abandon carts with products they desperately want… And it has nothing to do with price. It’s cognitive dissonance. Leon Festinger’s 1957 theory of cognitive dissonance showed that humans experience psychological discomfort when their actions conflict with their beliefs. His original study was groundbreaking (and definitely worth the read if you like nerding out on this stuff like me): Participants did boring tasks for an hour (turning pegs on a board). Then they were paid either $1 or $20 to lie and tell the next person it was fun. The $1 group later rated the task as more enjoyable than the $20 group. Why? The $20 group could justify lying for good money. The $1 group couldn’t, so they changed their belief about the task. They reduced dissonance by convincing themselves it actually WAS fun. Now apply this to buying: Action: Spending money Identity: “I’m responsible/frugal/smart” That conflict kills sales. So stop trying to overcome the objection and reframe what buying means instead. ❌ Instead of: “It’s worth the investment” ✅ Try: “Smart money multiplies itself” ❌ Instead of: “You deserve this” ✅ Try: “Pros invest in tools, amateurs invest in courses” The purchase has to ALIGN with their identity…not fight it. Here’s some identity-alignment angles that work: For coaches: “Serious coaches have serious systems” For agencies: “Real agencies run on frameworks, not hope” For entrepreneurs: “CEOs invest, employees expense” Even better, use their hesitation against them: “Still thinking about it? That’s exactly why you’re stuck.” “Waiting for the perfect time? Pros create perfect timing.” “Need to check with someone? Leaders make decisions.” Now NOT buying means they’re not who they think they are. The dissonance flipped. Layer in future identity projection to supercharge this strategy: “A year from now, you’ll be the person everyone asks for advice.” “This is the decision your future self will thank you for.” They’re not just maintaining their identity…they’re upgrading it. The resistance dissolves and they happily turn into a customer. Because you stopped selling them a product and started selling them a better version of themselves.