The Pricing Psychology Most Business Owners Miss

Most UK business owners worry that raising prices will “chase customers away.”

But data and behavioural economics say otherwise.

McKinsey research shows:

A 1% improvement in price (without losing volume) can boost operating profits by up to 11%.

And yet…

Most small businesses spend 10x more time cutting costs than optimising prices.

Here’s the catch:

It’s not how much you charge it’s how customers perceive what they’re paying for.

Three pricing insights that change everything:

1. Anchoring: The first price customers see sets their mental benchmark. Frame value before they compare.

2. Decoy Effect: Offering a “middle” option often drives people to your most profitable product.

3. Loss Aversion: People are more motivated to avoid losing value than to gain discounts. “Don’t miss out” beats “Save 10%”.

So before you run another sale or discount…

Ask yourself: “If I explained my value better, would I even need to lower my price?”

What’s one pricing change (big or small) that had a surprisingly positive effect on your business?

Or what’s stopping you from charging your true worth?

0 comments

skool.com/epic-society

Where Entrepreneurs Pursuing Impact and Change come together.