I’m happy to announce that this week is, in fact, the final part of my Psychology of Pricing series, where I share research-proven tactics to make the most out of the prices you display. If you haven’t listened to the previous parts in this series, I suggest you go back and do so before continuing with this one. I'll still be here once you’re done. These pricing tactics are great to use in your design business. But the real gem here is they can make you look like a pricing guru to your clients. Imagine improving their conversion rate simply by manipulating the way you display their prices. They’ll be throwing money at you. As in the previous episodes. All of these tactics I’m sharing come from Nick Kolenda. Specifically, an article on his website nickkolenda.com titled appropriately enough The Psychology of Pricing. The Psychology Of Pricing - Part 6 In the previous five parts of this series, I shared various ways to manipulate how a price is displayed to improve sale conversions. In this last part of the series, I’m going to share how to use discounts properly. According to Nick, if not used properly, discounts can actually harm your business. In fact, some people suggest you should never use discounts. That may be a bit extreme. Discounts can prove useful if you know how to use them properly. But how can offering a discount backfire? For one, if you offer discounts too frequently, customers will become more price-conscious and wait for the next discount. Offering discounts can also lower the reference price of a product. I’ve talked about reference prices in previous parts of this series and how they create the bar by which consumers judge other prices. Offering a discount can lower the reference price, causing people to purchase less in the future when the price seems too high. So reducing the frequency and depth of discounts helps. But there are a few other tactics you can put to use that will help you as well. Tactic 46: Follow the “Rule of 100.” In a previous episode, I shared how people can perceive different magnitudes for the same price, depending on the context. For example, changing the words that appear next to a price from “High Performance” to “Low Maintenance” can reduce the magnitude of the price, making it appear smaller. Discounts are no different. When offering a discount, you want to maximize the perceived size of the discount so that people feel like they are getting a better deal. Consider a pair of pants selling for $50. Which discount seems like a better deal: 20% off or $10 off? If you do the math, you’ll see that the discounts are the same. But at first glance, 20% off has the advantage by seemingly being larger than $10 off. That’s where the “Rule of 100” comes in. If the price you are discounting is under $100, you should always offer the discount as a percentage. Saving 10% off a $20 item sounds much better than saving $2 off a $20 item. Don’t you agree? However, as soon as the price you are discounting goes above $100, you should switch to an absolute price discount instead of a percentage. So for a $250 item, offering $25 off creates a higher perceived magnitude than offering 10% off. Tactic 47: Mention the Increase From the Discounted Price. This tactic also relies on magnitude. When a price is reduced, the emphasis is placed on the decrease—Now, 20% Off.  However, a way to once again increase the perceived magnitude of the discount is by reversing the way you announce it. Instead of saying “Now 20% Off,” try something like “Was 25% higher.” It will make it more persuasive because it shows a higher numeral. Tactic 48: Provide a Reason for the Discount. To maximize the effectiveness of a discount, explain why you are offering it. For example, stores may offer a discount because of inventory surplus. Or maybe it’s to clear out outdated stock. Clothing retailers do this all the time. When the new season’s fashions arrive, the previous season’s inventory goes on sale. Or perhaps you can say you are