If you have an ecommerce site, how often do customers visit – often after a costly paid click – and end up leaving without buying? Are abandoned shopping carts all too common? Or, if your customers visit your retail store, how often do you see them compare several items, only to buy none of them and move on? If you stock similar items (and who doesn’t?), the problem could be your pricing. […]
If you want to sell more product by running a sale, which would make more sense: advertising “price cut 33%” or “50% more” product? Functionally, the two are the same level of discounting. Researchers at the University of Minnesota found, though, that a “50% bonus pack” sold 71% more than a “35% discount,” even though the latter is a slightly lower price per unit. […]
In my time as a catalog marketer, I almost always priced products just below the next dollar increment – a cheap item might be $9.97 rather than $10, while a more expensive item may have been $499, or even $499.99, instead of $500. My strategy was based on a couple of assumptions. First, I thought that there was probably something desirable about offering, say, a “nine-dollar-and-change” price vs. a “ten-dollar” price, i.e., even though the difference was only a few pennies, some customers would perceive the $9.97 price to offer more substantial savings. Second, I observed that big marketers like Sears, who could afford to test any number of pricing options, tended to stick with the “just below the next increment” approach. As it turns out, I was right, but for the wrong reason. New research points us toward the reasons why consumers respond better to a $499 price vs. a $500 price, and it has more to do with the apparent precision of the odd number: […]
This weeks picks include the science of first impressions, how to be someone people want to talk to, when to use rounded prices, and lots more!