Applied behavioral economist Melina Palmer, CEO of The Brainy Business, discusses her new book, “The Truth About Pricing: How to Apply Behavioral Economics So Customers Buy.” Melina shares her insights into pricing psychology and determining customer value, explaining perceived value, dynamic pricing, and the pitfalls of low pricing strategies. Learn effective pricing and the impact of psychology on sales and business success. Access the free book chapter offer in the transcript.
Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS:
Melina Palmer: I just know that everyone in business really struggles with pricing, and it’s so key to your success at being confident in whatever your price is. And being able to communicate it in a way where people feel safe is critical to being able to sell more of the right things.
Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on marketing and advertising produced weekly by Bigeye, a strategy-led, full-service creative agency growing brands for clients globally. Hello, I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us. In today’s economy, still marked by inflation, understanding pricing is critical. Traditionally, product and service brands have leaned on cost-plus or competitive-based models to set their prices. But as we’ll learn today, these pricing models overlook the deeper psychological factors that drive consumer behavior. Our guest today will be sharing how to rethink pricing strategies by leveraging the science of behavioral economics. Making her third appearance on IN CLEAR FOCUS, Melina Palmer is the founder and CEO of The Brainy Business, which provides behavioral economics consulting to businesses of all sizes worldwide. Now, Melina’s podcast recently celebrated its 350th episode. The podcast is listened to in over 170 countries, has over 1 million downloads, and is used as a resource by many universities. Melina talked to us in June 2021 about her first book, “What Your Customer Wants And Can’t Tell You,” and returned in November 2022 to discuss her second book, “What Your Employees Need And Can’t Tell You.” Well, Melina has a new book out, published today, called “The Truth About Pricing: How to Apply Behavioral Economics So Customers Buy,” which details how to navigate pricing psychology and help determine what customers truly value. I’m thrilled that Melina is joining us on the book’s launch day from her home office in Tumwater, Washington State. Melina, welcome back to In Clear Focus!
Melina Palmer: Oh, thank you so much. I am delighted to be back – and what a wonderful day to be able to be here with you.
Adrian Tennant: First of all, congratulations – three books in three years! That’s quite an achievement. For folks who missed either of our previous conversations, could you briefly explain what your role as an Applied Behavioral Economist entails?
Melina Palmer: For sure. So the real thing is, when we think about our brains and how we buy things and how we exist, we have a real idea of how we think it works, how we believe things are going to be, and what people should do, whether it’s us or other people. And what research has found over time is that people, ourselves included, don’t always do what we think that we or they should. And so what that meant is that over time, economic models didn’t really accurately predict behavior. And so you had Psychologists and economists and neuroscientists working together or entering into one another’s fields to try and see if there were these common themes in how people make decisions. And that is how behavioral science and behavioral economics came about. So, I like to say that I help people understand how to better communicate with the brain to make it so that customers buy and employees buy-in.
Adrian Tennant: Your new book, published today, is entitled “The Truth About Pricing, How to Apply Behavioural Economics So Customers Buy.” Now, pricing was a topic included in your first book, so what prompted you to write a whole book focused on pricing specifically?
Melina Palmer: You know, it’s a funny thing that, actually, the first book was almost the pricing book. So I’ve known from the beginning that there would be a book about pricing, and when the publisher picked up and wanted to have me write for them, they opted for the other book first. And then the second book, it was timely, and it had to come out, and we’re talking about great resignation, that sort of stuff. And so then I knew pricing was coming, and it just ended up being the third book. So, with that, when we look at pricing, I do this work with clients all the time, from solopreneurs to global corporations, and the thing is, people really hate pricing! It’s really difficult for us. And it’s something where we get stuck, and we get in our own way a whole lot of the time. And you know, as I was working on the book and getting set, doing research and things, people were like, “Oh man, I really need that book, and I would never want to write it. That sounds like a terrible thing. I hate the idea, and I need this book yesterday.” I’ve had so many people talk about that, so I just know that everyone in business really struggles with pricing, and it’s so key to your success at being confident in whatever your price is and being able to communicate it in a way where people feel safe is critical to being able to sell more of the right things. So it’s in this perfect spot of people don’t like it, but they know it’s important, and if they would just have a little bit more confidence, it could go a long way. So that is why there ended up being a whole book about pricing.
Adrian Tennant: Well, “The Truth About Pricing” is divided into three sections. In the first, you establish some basic principles about pricing and how it influences companies’ revenues and profitability. Melina, how does pricing based on behavioral economics differ from traditional approaches?
Melina Palmer: So the big thing when you go and research and look up pricing strategies and options, I was absolutely amazed at how few of them even mentioned psychology as something that was important to consider when you’re working on your pricing strategy, and those that did would include it as an option of a type of a model that you could use. And in that way, they really limited it to something as simple as having your price end in a nine instead of a zero. And while that is an important decision and, maybe it’s a spoiler alert, maybe not, but not every company should be rounding down their prices. I talk about it quite a bit in the book. And that is something that comes from psychology, but it’s barely even the tip of the iceberg of all of what it is. So, when it comes to pricing, psychology Is everything. And in the book, I talk about the way, of course, that this is going out to customers when they’re buying, as well as your own kind of mental blocks and how you think about and set up that strategy. So when we look at the behavioral economics angle, it’s bringing that psychology into everything you do. It’s not a question of if you use it; it needs to be everywhere. And how you use it in different ways it gets applied is what the book gives you: the skills and the step-by-step process to be able to do that.
Adrian Tennant: We’ve probably got our own biases and assumptions, but in what kinds of ways does pricing factor into consumers’ decision-making processes?
Melina Palmer: Oh, well, good news. I wrote a whole book about that! But really, the psychology of pricing comes into everything, and the book is called “The Truth About Pricing,” and on page three, I let you know what that is. So you don’t have to wait a long time to get to the truth. And the truth about pricing is that pricing just isn’t about price. All the things that happen before you get to the price, which is where a lot of that psychology comes in, matter more than the price itself. So being able to understand what people are going to do, what they care about, what they value, how you can frame the message in a way that’s going to be enticing to them, having it that it’s drawing them in versus an unintentionally kind of pushing them away, understanding how we’re a herding species, and that impacts our decision making when we see ratings and reviews and other people like us talking about it, and the social proof. There are so many factors that go into whether or not we choose to buy something. And, when you consider them all properly, it gets to a point where that price is almost a non-issue. So, for everyone who’s hearing me say that and you’re thinking, “Nuh-uh, I price shop all the time.” Or you say, “But I’ve tried to sell things, and people tell me that they didn’t pick me specifically because my competition was less expensive than I was.” When you don’t properly go through these steps and understand the psychology, the decision does come down to price because there’s nothing else to be able to make a clear decision on. But when you’ve factored this in, you can make it to where there are those things that you’ve bought where you say, “I never do this, but those things, there are reasons that we feel that way and that it’s the thing you just have to have and you can’t stop thinking about and you can justify the logic every which way is because you’ve, you know, primed and set yourself up and, you know, the business as well, becomes to where it’s not about the price.
Adrian Tennant: We’ve been living through a period of rapid inflation, with the cost of everyday grocery items seeming to rise on every visit to the supermarket. Melina, what are some mistakes that you’ve seen brands make that reveal maybe some misconceptions about pricing?
Melina Palmer: You know, it’s interesting, whenever I think about rising prices, this is something where brands of any size get really focused on justifying the choice to raise the price and can overcomplicate and explain away why something happens, like needing to justify the decision that was made. I remember a friend of mine who’s a hairstylist and was having to raise prices after “It’s been 10 years, and I’ve never raised my prices.” And she wanted me to look over the letter that she was going to be sending out. This was years and years ago. And it’s something like, “We’re so sorry. I know that you’re not going to like this and it’s going to be difficult to hear. I know how hard it is, but we haven’t raised prices in all this time, and these people have raised their prices, and this has happened, and we’ve been under all this stress, and it’s been difficult.” It’s just on and on and on and on and on and on and on until you get to “And I’m so sorry, but we’re going to have to raise the price.” You know, sort of thing at the end. And I said, “Okay. Do not send this. This is not the way to communicate. And we can look at ways to be reframing,” I was saying to her, too: “We get so close to our own prices, you feel like everyone must know exactly what it is, and the thing next to you is a penny different.” And in general, people don’t remember the exact price of what they saw at the other thing, or what they paid last time that they were in there. Sometimes, we do, and we do get fixed on prices sometimes. And like you say, in times of inflation, where there are posts about how the holiday meal is X percent more than it was last year. Or, “My grocery bill was this, and now it’s that.” And people can really get to where they’re making that more visible. So that can be something that you’re having to combat, but in general, people are not paying as much attention to our prices as we think that they are. And if we’re able to, again, communicate about what the value is to them in a way that is, just framed in that more positive space, it can smooth over and make it to where when you do really over justify, you make it about you and not about them. And people just don’t like that, and they’re more likely to rebel.
Adrian Tennant: In the second part of “The Truth About Pricing,” you really dive into the psychology. Now, before founding your behavioral economics consultancy, The Brainy Business, you worked in corporate marketing and brand strategy for around a decade. So Melina, which principles of pricing would you say are the most important for advertising and marketing communications professionals to really understand?
Melina Palmer: So I have it in the book, and it begins part three, which is where we get into the framework – my It’s Not About the Cookie framework and how to present those prices. And so, by that point, we get into concepts. You know, how you say it matters more than what you’re saying; framing is something that I always, always recommend as a really great place for people to start. And as this book shows, and as you’re saying here, that doesn’t come until part three. So part two is all these thoughts and decisions that you need to be making to be able to even have that proper foundation to then think about how to present the product and your price and your brand. And so through part two, we start also by thinking about you. We start with you because, as I’ve sort of hinted at already, you are your number one enemy when it comes to being able to present price as well. And this is the collective you; it’s not you specifically, but anybody who’s going to be doing that pricing, who’s selling on behalf of your organization, writing the copy, putting something out there and interacting with customers, all that you. If you have people that feel like, “Oh, no one’s going to pay this much for that,” or “I wouldn’t do that,” so whatever, right? Those things are going to get in your way. So, really helping you get on board is the first step. And then we talk about your customer. What do they care about? What’s important to them? Understanding those values that you’re going to want to be communicating. We then look at the market. That’s kind of the competition who’s out there before you get to your own company. Then we look at what it is that you’re offering, how that lines up with the values of the customer and what’s already in the market, and then finally looking at some of those numbers before we then look at how to present the price, the product, and, you know, it against other items that you have that are available and things. So, really understanding all these ins and outs. In the book, I talk about preparing like a method actor. And those actors and actresses who we see that just capture our imagination and really pull you in, and they own that role, right? Meryl Streep is a common person that we would look to for this. When you think about how they prepare, it’s not just like, “Oh, I read the script, and now I’m going to go,” right? They understand everything about their character and even start to live in a way where they’re able to fully embody that mind space of whomever it is to where when someone, you know, a director or something would make a recommendation, they can say, “My character would never do that. She would never do this thing. “And it’s because they get it. They own it. They’re coming from this place. you know, I give examples like Daniel Day-Lewis when filming Gangs of New York Only wore a very thin coat and ended up with pneumonia. But he wanted to be able to understand what it was really like and there are so many of these examples. You need to understand who you’re communicating with, you need to understand your customer at this depth to where you can understand the nuance of where they are and what they’re looking to do, what they care about, what they’ve done recently, and how that all aligns in the choice that you’re looking to give to them right in this moment. And there’s a lot of preparation that no one else is ever going to see. But if you put in that effort, it makes a huge difference in whether that person feels seen in the way that you’re communicating about the item. And then again, where price becomes less of an issue.
Adrian Tennant: Let’s take a short break. We’ll be right back after this message.
Jenny Li Fowler: Hi, I’m Jenny Lee Fowler, the author of January’s Bigeye Book Club Selection, “Organic Social Media: How To Build Flourishing Online Communities.”
My book is a guide to enhancing your brand’s growth through effective digital engagement. I provide you with strategies for selecting the right platforms, streamlining approval processes, and building an organic online presence that’s aligned with your broader objectives. The book also covers content planning, goal setting, and resource management, providing you with insights into executing plans and tracking your success.
Adrian Tennant: Welcome back. I’m talking with Melina Palmer, Applied Behavioral Economist and the author of “The Truth About Pricing: How to Apply Behavioral Economics So Customers Buy.” So, Melina, you also write about the concept of perceived value. Now, how does perception influence consumers’ willingness to pay for products or services?
Melina Palmer: The way that we look at the value of something isn’t necessarily in the cost that goes in for the company, right? And when you put in all these details, like where I was talking about my friend and her hair salon, and by saying, “Well, the cost of scissors went up, and my rent was raised,” and like all these little nuances, people don’t necessarily want to have that information because it makes it really nitpicky and again, it doesn’t feel like it’s about them. In the book, I talk about grilled cheese sandwiches as my favorite example of how this all comes together. So if we think about making a grilled cheese sandwich, even people who don’t cook you could probably figure it out, right? It’s pretty basic, and the ingredients cost, you know, maybe a dollar, perhaps more, but not much, right? It’s a pretty easy thing you’d be able to pick it up and could, at least, fumble your way through making a grilled cheese. And now I always like to ask, you know, if you were gonna go out and buy a grilled cheese sandwich, like you really need one, right? You have this hankering, you’ve been craving grilled cheese for a week, and finally, you’re just going to give in, and you’re going to get that grilled cheese sandwich. What is the most that you could imagine paying for one? And now I know we’ll have our listeners thinking about this and get a number in your head. I know that you, of course, read in the book, but for yourself, do you have a number that comes to mind of what you’d be willing to pay for a grilled cheese?
Adrian Tennant: For some reason I’m fixated on 5, 6, 7, but I guess the longer the period goes, the more I’m desiring one, the more I’ll pay, right?
Melina Palmer: So that’s what you’re saying, five or six or seven? I’ve had, you know, people say, “I don’t know if it was like a really luxurious grilled cheese. I really want it. Maybe 20 or 25.” I’ve had people say they’d go that high, right? So there’s a restaurant in New York. It’s called Serendipity 3. On their menu, they have a $214 grilled cheese sandwich. And you may be thinking, “That’s gotta be a PR stunt!” And in a lot of ways, ye, it is. It’s a Guinness World Record holding as the most expensive sandwich. And yet, people do buy it. They do have people who will order it, and they post about it on social media. I talked a little bit about social proof, right? It’s not the only thing, though, that they buy, and it’s not their only really crazy expensive item like that. They have $200 French fries. They have a thousand-dollar vanilla sundae they sell. And with the grilled cheese, if you were to go in, even if you know the story about Serendipity 3 and you think, “Oh, we gotta go in there. We’re going to get something. I’m not getting the $200 sandwich. I mean, come on. I’m definitely not getting that. But this $35 sandwich seems interesting, right? And I can post and say I was here and I got a little sample, I got a taste of what’s so special about this place. And I’ll remember, you know, I have the memory forever.” So, what’s important to note here is when I told the story in this way, starting with the $214 and all these things, and I say I’ll buy the $35 sandwich. Before, when we were starting with “What would you pay if it’s a dollar for the ingredients?” You’re like, “Maybe five,” right? But when I told it the other way, you’re like, “$35 seems reasonable. I would try it. I want to try this sandwich. I want to figure it out,” right? You want to see what the hype is about. You’re excited about this prospect. Not everyone, but they don’t need everyone. That’s not the point, right? So knowing in this way, when we frame it properly, when we share all these other aspects, people want to be a part of whatever that is, and the value is not just in the cost of the items. And just to push it one little step further here, I also love the example of, maybe you remember, maybe you don’t, the Virgin Mary grilled cheese, which was a sandwich. There was a woman, many years ago, who made herself a grilled cheese sandwich, sat down to eat it, took one bite, and then looked and recognized the face of the Virgin Mary in her sandwich, which she put in a clear container, reportedly with just some cotton balls in it, and set it next to her bed where it had its place of honor for a full 10 years, never getting a speck of mold, as she says before she decided to sell it on eBay – where she got $28,000 for this 10-year-old sandwich, and it had over, I think, 38 bids to get to that price. So, again, most people wouldn’t even pay $28,000 for a new sandwich, let alone one that’s been hanging around for a decade. But you don’t need everyone if you’re looking to sell at this price point; you just need one, like she had, And if you look at Serendipity 3, they don’t need everyone to buy that $200 sandwich. And not everyone is their client, but you have enough of them, and it’s able to sustain this bigger model. And even a place like Five Guys that is selling, I think, when I put it in the book, it was like $4.38, I think is what they were selling their grilled cheese sandwiches for. That’s still pretty expensive when you think about a grilled cheese sandwich. but they’re going to be able to sell a lot more of them at that price point. So really, you can charge whatever you want for anything when you understand who it’s for, what they value, how to communicate it, and all those psychological aspects that I talk about in the book.
Adrian Tennant: Excellent. We love strategic frameworks on IN CLEAR FOCUS Could you tell us a bit about the origins and use of the Nudgeability Quadrant?
Melina Palmer: Yeah. So, the origins are my brain is where that came from, building that out. And really, As I was working on this book specifically, it was realizing as it’s written. I’m not communicating with people because typically I work with clients, you know, one on one, we’re engaging and working on things and I’m doing a lot of this work, helping people to be able to really do this on their own and be able to spot different moments in their experience to find the right ones to incorporate some behavioral concepts into, is what determined kind of the need for this Nudgeability Quadrant. And as most quadrants are, it’s pretty simple, right? As we look at how nudgeable something is and then how important it is in the overall experience. And one thing that’s important to note when we look at different moments of experience, research shows that humans are making 35,000 decisions every single day, each one of us. And so what we think is a decision point can be broken down into many, many, many micro-moments. And those micro-moments are our moments of nudgeability. Just a little bit where we can kind of “boop, boop,” you know, keep you on track of where you want someone to go. I like to think about it like bumpers in bowling, right? So if somebody’s starting to veer, it’s going to keep them on the path. You need to know, though, where they’re coming from, where you want them to go, and make it as simple as possible, essentially, to get there. So, as you identify all the different moments that you are looking where you may be needing to nudge, whatever it is you’re working on. I give, you know, an example of an abandoned cart. Somebody left something in their cart on the website, and you want them to come back and buy things, as happens often. So, understanding all the different moments that matter when you’re looking to optimize and encourage someone to come back and buy from you, pricing is one factor in that, of course. But we’d say you need to be sending an email maybe 24 hours after that cart has been abandoned. And we may just put that as one thing, but really, we’ve got the subject line. You need them to open the email, you know, click on it, that’s one thing. You need them to read enough to understand what’s going on and then probably click on something else. And then you need them to go by and right there are lots of little micro-moments in there. So breaking those each down into the moments and then placing them by their importance or unimportance as well as how nudgeable they are in that moment, how likely. A little reframe, a little concept here or there, a little something is going to bump them back on track where, of course, everyone has free choice. A different example I give in the book to define some of the nudgeability and whether a moment is nudgeable: if you think about if somebody is leaving and [they] say, “I’m never gonna do business with you again, I hate you, and please just cancel.” Maybe if we think about – not to throw anybody under the bus as they say – but when people are fed up with their cable company and “I’m out, just like, let me leave,” and it feels like it’s difficult to cancel. This is an important moment, but it’s a lot less nudgeable when they’re potentially too far gone to get them back from there. It’s not unheard of. It is, like I said, still an important moment. But it’s a lot harder to nudge them when they’re saying, “Please just let me go. I’m done. I’m done. I’m done. I’m done.” There was a moment though before that that probably was much more nudgeable where you could have done something that was also very important. Maybe when they called into the call center and had a complaint about something or if we were paying attention to something they put into a chat or there was an error on their bill. And even something with billing, sort of important, also not as nudgeable. It’s not not nudgeable, but if you’re not interacting with someone, it can be harder to get them to shift their behavior because they may or may not be actually reading what you want them to pay attention to. Less control over the experience. So those factors come in as we plot things on that Nudgeability Quadrant to identify which moments, those micro-moments, to start with as you begin to incorporate the behavioral science concepts into how you present your pricing and your products.
Adrian Tennant: In the third part of “The Truth About Pricing,” you discuss how managers can implement effective pricing strategies, including some considerations around dynamic pricing. Melina, could you explain what dynamic pricing is and some of its benefits and potential drawbacks?
Melina Palmer: Yeah. So, dynamic pricing, you know, the common example we look at here is with airlines, right? So where they say, “There are only two seats left at this price,” or there’s one and until we’re going to go up. This is able to bring in some scarcity, both around time or possibly about amounts or quantities of things that exist. And while not every business has some of that dynamic pricing, there can be advantages to them in just that, in that scarcity and loss aversion or FOMO where we feel the need to jump on whatever is available there. And scarcity is a huge piece of the It’s Not About The Cookie framework. I talk about it in depth, and there are four different kinds of scarcity and which ones you use based on whether you are what I define as either a quality business or a value-based business and I help you make that decision throughout the book. As you look to price and put together what you’re offering is, there are some things that are naturally inclined to be scarce and have differences in pricing, like going to an event, right? Going to watch a concert or something. Different seats have different proximity to the stage. Different seats may have an obscure view. Some of them, if you buy early, you may get a discount – going to a conference or something. All these different aspects. And once the thing has happened, you can’t go back. And there’s only one of this exact seat. And maybe you need five seats together, and that’s more difficult to find. All these different aspects come into changing the price based on seats and things like that. And again, I already mentioned with airlines this is pretty common. Hotels, we know that not everyone pays the exact same price even if they stay in the exact same room. And there are plenty of search sites that showcase why that’s a value to use them. In the case of most of the people for whom this book was written, you probably won’t be getting too much into this aspect. When you look at an airline – and I used to work at an airline – they have many people running very complex algorithms that are created to help understand the very finite, tiny changes in how these work. It’s a whole thing that most businesses don’t need to get into that level of depth. That being said, you may have introductory pricing – “For the first 50 people we’ll do it for only this price,” or whatever, right? Understanding that not everyone has to pay exactly the same. And fairness is also somewhat relative in this way. When we’re building our own stuff, it feels like everyone has to have exactly the same thing, or people are going to rebel. And while fairness, of course, matters, it’s not quite as obvious as we think it is, especially based on how we talk about the different items and again, where their value is. People can understand and appreciate that “This seat, I paid a different price than this person because they booked three months in advance and I bought my ticket yesterday,” or whatever that happens to be.
Adrian Tennant: For certain products on IKEA.com, the phrase “New lower price” appears in red letters. And underneath the current price, visitors see the previous price. Now, IKEA is following a price-cutting trend that we’re seeing among other retailers such as JCPenney and Walmart. Melina, this sounds like it should be a good thing for consumers, but are there potential pitfalls when pursuing a lower-price strategy?
Melina Palmer: Oh, sure. Yeah, as a customer, there are lots of people out there that love a bargain, right? So I know I mentioned briefly about the quality business or a value-based business when people are choosing what type of company they want to be, and this is a really key moment if you decide you’re going to be doing a lot of sales and things are not. So, a quality business Includes our luxury brands. They’re ones that are maybe they’re using sustainable products. You have high expertise that maybe your competition doesn’t have if you’re selling services. they’re handmade, actually using very high-quality materials, things like that, and limited runs, those are going to be your quality brands. You can still have a good value for people, but quality is where you start, right? Louis Vuitton would be over here. We also have value-based brands which can still sell quality items. It’s not that it has to be a bunch of junk, right? But you are looking at being a really great deal for people. It’s a value. It’s a bargain. And this is where those types of businesses are more likely to be considerate of the penny difference and things like that. They’re really trying to save people money. They may sell a lot more items with lower margins on them, which is kind of common in this case. As I alluded to earlier on, our quality businesses. Typically, I recommend that you have a whole number pricing, so you would sell at 500 instead of the discount kind of value model, which is more likely to be your 4.99 or 4.97. It just feels different to us. IKEA falls on the value side pretty clearly, right? That’s where they are. They’re all about that. And you even have to put stuff together yourself to be able to get this lower price. And people are willing to put in that effort, to pay less for the items, right? So where companies get into trouble is when you mix because it’s really easy to say, “But I want both quality and value. We can do both. I know other businesses should have to decide, but we can make it work.” I urge you not to attempt to do this. It becomes a lot of cognitive pressure for your buyer. It’s hard for them to understand this kind of dividing line where you fall. And even if they wouldn’t come up to you and say, “You know, it’s interesting. I’ve been getting quality vibes, but then I see these value-based prices, and it feels off to me.” Right? They’re not gonna say that, but they may just say, “You know, let me think about it.” And then maybe they buy from your competition, or maybe you know that you want to be selling your quality type of brand, but people ask you for discounts all the time, and you’re not really sure why. This mixed messaging is a big problem. So if you’re trying to be a quality business, and then you’re feeling compelled to run a bunch of sales, slash prices, and do these discounts, It can feel off, and that can be a really bad choice for a company. And so, understanding what type of brand you are before you determine that type of strategy is really important. And again, that’s why in the book, this is one of the few things that comes up at least three times where I have tasks and things for you, throughout chapters that you need to make a decision about something. You’re going to finish an exercise. You’re going to answer certain questions. And I have these prompts that are also in the summaries at the end of each chapter. And determining if you’re a quality or a value business is a task two or three times where I say “Check again, make sure because this is really important.” Yeah, that is a place where it can really go awry if you don’t align those things properly.
Adrian Tennant: Well, as is the case with your first two books, most of the concepts in “The Truth About Pricing,” have episodes of the Brainy Business Podcast, which are easily accessed via QR codes that you’ve included in each chapter. Melina, how do you foresee readers interacting with the additional material?
Melina Palmer: Yeah, so with my first two books, they really get into the why and the science behind each of these concepts and things that I’m talking about throughout – lots and lots of citations. And while this book, “The Truth About Pricing,” also has plenty of citations in it, and it’s also rooted in science, I know that by the time people need help with pricing, it’s very much not always too far gone, but this is something that people tend to put off. I talk in that “You” chapter I mentioned at the beginning of part two about how it can be really easy as we think. You have plenty of time, and, “Next week once we make these other decisions, I’ll be able to evaluate and really get in-depth on the price.” And, of course, then something comes up, and we keep putting it off. And then one day, you wake up and realize, “Oh no, we’re supposed to launch on Friday, and we haven’t finalized the price yet.” And then you scramble and end up picking that you want something, you know, price that kind of comes out of the air. Usually, it’s something like a dollar less than what your competition is charging or some percentage up against the costs that you are acutely aware of. And you probably then vow, “Three months or six months from now, once the launch is done, then we’ll hunker down. We’ll really focus on price the way that we should.” And now it’s been four years, and you still haven’t evaluated your prices again, right? Because it’s one of those things we just love to put off and dwell on for a really long time. So this book, and I make the promise to the reader – you may have noticed that brevity isn’t always the best of friends with me. I want to explain all the nuances of all the things. And I did my very best in this book to limit it to the least I need to share to help you to make the decision so you can be confident in your prices. And so there are lots of links out to learn more about concepts, whether that’s the first books or it has to do with the podcast or something else. And in that way, this book is a standalone. You don’t need any of those other resources. And for people who just want to churn through and use the book as it is, wonderful. That’s what it’s there for. If you get into it and you think, “Oh, I want to learn more about this, and I want that,” those resources are available as well to help someone be able to learn as much as they want or as little as they want to be able to get to that pricing decision. And so it also has there are some things, checklist, and worksheet stuff that’s easier to not have in a book or for people who get the audiobook, or the Kindle edition, wanna have something, kinda separate that you can be used again and again. So that’s how those QR codes are helpful to get you [to the] glossary and additional resources.
Adrian Tennant: Perfect. Melina, if IN CLEAR FOCUS listeners would like to learn more about you, The Brainy Business, your podcast, or your latest book, “The Truth About Pricing,” what’s the best way to connect with you?
Melina Palmer: Well, thank you so much for asking. for anyone who is interested in checking out the books, of course, you can find them wherever you buy books, and you can also go to our website, TheBrainyBusiness.com, for books and podcasts and things like that. And for all of your listeners, we have, of course, a nice gift to sort of “Try before you buy” opportunity. So, if people want to go to TheBrainyBusiness.com/inclearfocus – all as one word – you can get a sample chapter of any of my books for free, just to see how you feel about it and if you want to move forward from there. So yeah, you can go there. You can also find me on all the socials as thebrainybiz and as Melina Palmer on LinkedIn.
Adrian Tennant: Melina, thank you very much for being our guest again on IN CLEAR FOCUS!
Melina Palmer: Oh, of course. Thanks again for having me.
Adrian Tennant: Thanks to my guest this week, Melina Palmer, Applied Behavioural Economist and the author of the new book, “The Truth About Pricing: How to Apply Behavioral Economics So Customers Buy.” You’ll find a transcript with links to the resources we discussed today on the IN CLEAR FOCUS page at bigeyeagency.com – just select ‘Podcast’ from the menu. If you enjoyed this episode, please consider following us wherever you listen to podcasts. Thank you for listening to IN CLEAR FOCUS, produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.