Home Theories Divide Prices into Smaller Units

# Divide Prices into Smaller Units

Reviewed by expert Scientifically proven

When it comes to prices, smaller is sometimes better. Dividing prices into smaller units can be a useful pricing tactic, making items seem more affordable and easier to budget for.

This approach can be especially helpful when selling larger items or services that come with a hefty price tag. By breaking down the total cost into smaller, more manageable chunks, customers are more likely to make the purchase.

There are a few different ways to divide prices into smaller units. One common method is to offer installment plans, allowing customers to pay for an item over time.

Setting prices can be a tricky task for businesses. They must find a balance between what the customer is willing to pay and what the business needs to make a profit. Many businesses use pricing tactics to help them make these decisions. One such tactic is dividing prices into smaller units.

## How does it work?

A new pricing tactic that has begun to surface is dividing prices into smaller units. This allows customers to feel like they are spending less money, even though they may be spending the same amount or more. The retailer then benefits by making more profit off of the customer. While this may seem like a win-win situation for both the customer and the retailer, there are some drawbacks to this pricing tactic.

The smaller unit prices can sometimes be confusing for customers, causing them to spend more money than they intended.

## How do you divide the price per unit?

To get the unit price of an item, we divide the price of a specific number of units by the number of units. To calculate the unit price of 12 ounces of soup that costs \$2.40, divide \$2.40 by 12 ounces to obtain \$0.20 per ounce as the unit price of soup.

When shopping for things at a store, it can be difficult to judge if a larger box is indeed a better deal. Fortunately, looking at the unit pricing of an item may help you figure out which bundle offers the best value for your money.

## Conclusion:

We are asked to choose between two things and judge which is a "better buy." In such circumstances, the unit price of each item is determined, and the unit prices of the items are compared. The "better buy" is deemed the item with the lower unit price.

### A new cognitive bias in your inbox every week

You'll get to learn more about CRO and psychology. You'll be able to take experimenting to a whole new level!

* We send our mails on Monday morning btw.

## Will you use psychology for your experimentation process?

Are you curious about how to apply this bias in experimentation? We've got that information available for you!

## Join over 452+ users

• Filter on metrics, page type, implementation effort
• More examples and code for experimentation

Pay with Stripe