Business NLP Blog

The concept of ‘Gasp Pricing’

What is ‘gasp pricing’?

Gasp pricing, generally defined, refers to the business psychological concept that it is desirable for a client to visibly “gasp” when they are told of the price of a product of service before they agree that the price is acceptable. When a client or potential client gasps, this is generally a sign that the price—although high—is one that they are ultimately willing to pay for a product or service offered by the company or the individual salesperson.
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The concept of gasp pricing is generally separated into two similar, but separate, business psychology concepts. The first concept involves pitching prices to clients in the context of a business meeting or business proposal or pitch; a common example of this practice of gasp pricing in use involves a person pitching the price, usually an employee at the company who is making a proposal, to a company that the parent company wishes to have as a client. When gasp pricing is used within this context, the person making the pitch must be especially careful to observe the body language of their clients or—depending on the exact context of the situation—potential clients. This is because how a client responds to a price pitch can reveal whether or not the individual pitching the price has priced the item too high, too low, or in a medium acceptable range—“just right.”

In an ideal situation, when the item has been priced high enough to satisfy the individual pitching the product but not too high for the client, the client will emit a small but noticeable gasp--or deep inhale of breath--when they are told of the price of the product, item or service being pitched or sold. They will then pause for about two seconds and then confirm that the price is acceptable in some way--for example, they may verbally express affirmation by saying "That sounds good," "All right," "Fair enough," and so on. They may also express affirmation through body language, such as smiling or nodding.

However, sometimes the price being suggested for a product or service is too high—or even too low. When the price is too high for the client, they often gasp but do not affirm that the price is okay within 2 or 3 seconds. The client may look around at other people—even those who have no say in the final decision making process—in astonishment because of the price. In this case, the sales pitch can still be salvaged by indicating that the price is open to negotiation, but it is important for those performing the pitch to take heed of such body language and respond accordingly.
NLP Training | NLP and Gasp Pricing

Sometimes, the price being pitched is acceptable to the client but is “too low” for the company selling the product or service. When the price is revealed but the client does not gasp, this generally indicates that the person performing the pitch could have gotten away with revealing a higher starting price; in this case, it is generally not possible to up the price because it would be a bad business tactic, but it is possible for the person performing the pitch to take notes on the experience and use the experience to better improve their pitch the next time around.

Gasp pricing can also be used in a more casual sales setting, or one which does not take place during a sales pitch in a boardroom or other professional company environment. This type of gasp pricing is used during floor sales or personal sales, such as those that occur regularly in retail shops and in personal businesses. For example, someone who runs their own used bookstore may use the concept of gasp pricing to better price their used goods at a price which is high enough to be acceptable to both the seller and the buyer; someone who sells items from door to door may also use the concept during haggling or their sales pitch to help them reach a more acceptable price.

In this context, gasp pricing is even more reliant on body language because these types of sales are often quicker and more impulsive than sales decisions which would be made in a boardroom or other employee environment. If gasp pricing is not used effectively in this secondary concept, it can mean lost sales or lost revenue for a company or an individual employee. The difference between these two sales concepts generally lies in the environment and reason for purchasing itself. For example: Clientele in a boardroom are typically there on behalf of a company which has expressed interest in purchasing products or services from another company; this transaction is usually weeks, months or even years in the making and a high price is generally not going to result in an immediate dismissal of the potential sales—it will usually result in more drastic or more frustrating haggling, however.
NLP Training | NLP and Gasp Pricing

On the other hand, sales which occur during this secondary context usually occur in a more casual and personal context; such as an employee on the sales floor in a retail shop pitching an item to a shopper who is browsing or someone who travels from door to door selling products or services on their own or as part of a larger company. These purchases are significantly more likely to be impulsive—therefore, if the initial price is too high and therefore not a successful “gasp” price, the shopper is more likely to decline to purchase and move on to another store or location. It is important, then, for employees who are operating within this second context to understand that gasp pricing can lead to more successful sales, but when it is not used properly it can lead to a lost sale, lost revenues, and an overall loss of profit for a company or for an individual who is selling items or products on their own.

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