Pricing Psychology: Anchoring, Decoys, and Freemium Models

In this episode of The Product Handbook, we dive into the psychology of pricing — and how small tweaks can change the way customers perceive value.

You’ll learn:

• How anchoring shapes purchasing decisions and why the first price shown matters so much
• The decoy effect and how an extra option can make your preferred plan look irresistible
• Why .99 pricing, freemium models, and value-based pricing work the way they do
• How to test and validate your pricing strategy with data instead of guesswork

If you’ve ever wondered why a subscription suddenly feels like a bargain or why one menu item makes the rest look affordable, this episode unpacks the frameworks and tactics behind pricing that sells.