Everyone Hates Marketers | No-BS Marketing & Brand Strategy Podcast · Louis Grenier | Marketing & Branding

Stop Wrestling With Pricing: How to Set Prices Customers Want

·59 min·5 clips

Melina Palmer explains why pricing isn't about the price—it's everything that happens before you say the number.

This episode of Everyone Hates Marketers features host Louis Grenier and guest Melina Palmer, an applied behavioral economist and host of The Brainy Business Podcast. They explore the psychological principles behind effective pricing strategies for businesses. Palmer argues that pricing is less about the final number and more about the psychology and value perception built beforehand. A core framework distinguishes between "quality" businesses, which should use rounded prices, and "value" businesses, which benefit from prices ending in 5, 7, or 9. Palmer explains that business owners must confidently pick one positioning, as confusing signals—like a firm seeing itself as a Porsche but clients seeing it as a dependable pickup truck—hurt sales. She advises against frequent price hikes, citing Costco's commitment to keeping its hot dog combo at $1.50 as a strategic value anchor. The discussion covers handling price objections by asking what a client needs to achieve for the price to feel valuable, thereby uncovering real concerns. A surprising example examines Supreme, which sells ordinary items like a brick or measuring cup at massive premiums solely due to its logo, leveraging scarcity and identity. For a hypothetical high-end octopus breeding business, Palmer illustrates building a premium package including tank maintenance and food, not just the animal. She emphasizes calculating costs but prioritizing the perceived value and status for wealthy clients, comparing the octopus to luxury cars or art as a status symbol. The process involves analyzing direct competitors, indirect alternatives like handbags, and the language of luxury brands such as the Burj Al Arab hotel. Key insights include the idea that confident delivery of a price often matters more than the number itself and that business owners are typically not their own best customers, leading to underpricing. The concept of "priming" with three carefully chosen brand words, like "opulent" or "thoughtful," shapes customer perception before a purchase decision. The octopus example highlights creating ongoing revenue through service packages and competing for a customer's discretionary "status" budget. The tone is conversational and educational, with Grenier posing practical challenges and Palmer providing structured, psychology-based responses. Listeners interested in behavioral economics and moving beyond gut-feel pricing will find actionable steps. Those seeking simple, universal pricing formulas or advanced data-centric models for large corporations might find the discussion too conceptual.

As heard by us

Pricing works better when the full experience is priced, not just the core offer.

This episode treats pricing as a question of value, not just a number at the end of a line. It begins with the familiar debate over whether prices should end in 5, 7, 9, or 0, then shifts to the more useful point: what surrounds the core offer, and what the buyer still needs…

Read the full review in PlayNext →

Why you'd press play

When the tank costs half the game, pricing stops being abstract fast.

Read the full recommendation in PlayNext →

Listen to the show on

Apple Podcasts Spotify

Play clips from this episode More from Everyone Hates Marketers | No-BS Marketing & Brand Strategy Podcast