An Easy Way to Make Your Prices Seem Lower
Does the way you write a price make it seem higher or lower? Of course! We already know that including a currency symbol can have a negative effect – that’s why you see some restaurants pricing a steak at “29” instead of “$29” (see Neuro-Menus and Restaurant Psychology). But new research shows that punctuation and decimals can make a difference in how people perceive prices.
According to a new study published in the Journal of Consumer Psychology, prices that have more syllables when spoken actually seem higher to consumers. Commas (e.g., “$1,699”) and cents after the decimal (e.g., “1699.00”) add to the number of syllables and hence make the price seem to be of higher magnitude. This effect occurs even when the price is written and not spoken – our brains, they say, use the auditory representation in storing the magnitude of the price even when the price is only seen visually.
The effect is due to the way one would express the number verbally: “One thousand six hundred ninety nine,” for the comma version, vs. “sixteen ninety nine” for the unpunctuated version. Visual length may also be a factor.
Proper Pricing Protocol
At at time when entire businesses are based on a consumer perception of value and low prices, these findings point the way to best price display practices. If you want your customers to look at your price as low, then omit commas and decimals. Don’t use $1,199.00, just say $1199. (You might even omit or minimize the currency symbol, which separate research has shown to trigger selfish behavior.)
Are Sevens Evil?
The experimenters didn’t address this question directly, but if you buy the syllabic count concept then “7” is a price to be avoided when possible. It’s the only number with two syllables, not counting “0” which is spoken as “oh” at least as often as “zero.” Similarly, “70” has three syllables vs. two for the other digits in the tens position. Combine them, and you find that “77” has five syllables compared to just three for “88.”
Don’t forget that many other factors affect price perception – just because it has fewer syllables, don’t expect an $88 item to outsell the same item at $77. Still, when you are setting up display prices in print, web, or TV ads, read the price aloud. Eliminate unnecessary elements like commas and decimals. And, if you can knock off a syllable or two without affecting your margin in a significant way, do it. And, if the price is being spoken (by a radio or TV announcer, for example), be sure that the script specifies exactly how the number should be read – you don’t want your syllable surgery to be negated by a longer spoken price!
Every once in a while I like to look at the new inventions on infomercials. The pricing always cracks me up. Something like…”4 easy payments of 49.95 plus shipping and handling. But if you call now, we’ll drop it down to 3 easy payments of 49.95 plus shipping and handling.”
Then I go to the website and find they have the same deal posted on there for about a week or longer.
Roger – thank you for posting this finding. We constantly leverage findings in JCR related to psychological type influence on behavior.
I wonder if one would get an amplified effect using simple to read fonts [speed] (per your book) +lowest number of syllables + heavy weight paper [trust] (again per your wonderful book) to maximize the value perception? I opted for simple fonts over the “effort value” associated with complex fonts in that it would appear that at the root of the syllable gain is fluency…so why slow down a price with complication.
Am I understanding you correctly?
Keep it coming!
Good thought, Keith. I’m sure fluency effects are at work with the pricing syllable effect the researchers found.
Then, you can use the inverse…. if you first make some price seem bigger (saying the commas, using some symbols) then you can make YOUR price seem slower.
And what about status? when someone whants something more valuable wouldnt it be better make it look less cheap?
Loved the flexibility of this study, thanks Roger, keep the good posts coming!
PD. i’ll be getting your book this wednesday, looking forward to read it
Gerardo, I think luxury goods sellers could definitely use this effect in reverse to create a “higher” price, though whether that would increase sales isn’t clear.
While this isn’t directly related, the image reminded me of a story of a store clerk who was told to “lower prices” on items along the top of a display rack. Instead of lowering the price, say from $50 to $30, he physically moved the price labels lower to the ground without changing the price and sales increased.
I don’t know how true the story is but it, like the example you have, forces us to keep in mind various ways to test our pricing options. Sometimes a small change can be the difference between highly profitable and losing money.
Interesting story, Matt! Physical position (low, high, etc.) and tactile sensations (warm, cold, heavy, etc.) can all cause emotional reactions and changes in behavior. If I were a retailer, I’d definitely test some “lower” prices!
I really enjoyed this article. All of the points you raise are fantastic.
I see lots of internet markets using prices that end with 7’s. People like 7.
There’s the added bonus of this: why charge 37 if you can charge 47? It’s hard to distinguish the difference (one’s closer to 40 and the other closer to 50, but we don’t see it that way – it’s disguised). The real breaking point is 50 – usually the decision whether they’ll buy or not.
Similarly, if you’re going to charge 77, why not charge 97? This has nothing to do with syllables – it’s more than 50, but still less than 100. That’s what really counts. The most successful online marketers use these price points.
Gabriello, I agree that “7” seems attractive despite its extra syllable. Sears, who at one point knew a lot about marketing, adopted prices ending in “97” years ago, and even today internet marketers seem to employ it frequently.
This bears out the importance of testing! Never assume that because something worked in one situation that it will do just as well in yours!
This is a great ‘trick’ to use on your products. I sell websites and I must confess I used this trick a lot. And still people are falling for it. Thanks for the great post what confirmes my little secret!;)
Interesting findings. Are there any similar punctuation studies when the “price” is a loan. E.g.: loan $10,000 vs. $10000
I haven’t seen the studies, Rasmus, but it seems logical that loan amounts could be affected in a similar manner to prices. Perhaps interest rates, too.
I’m wondering the application of the study when we consider a sale price? If the price was $40 and was reduced to $34.95, would the price seem lower (and move the needle more) written as $34?
We’ve tested percent savings as well, 50% vs 53%, but we don’t see much change either way. My gut says 50% is telegraphic, it’s not “read” but is a symbol, taken in as a whole unit.
When you have conflicting nudges, Thomas, it’s hard to say which will win. For example, $34.95 might work better than $34 or $35 because it is more precise, and hence more believable (see Precise Pricing Pays Off).
The real value still counts, too. Some rational folks will perceive a lower price as a lower price, regardless of syllables, precision, and other non-conscious effects! Glad to see you are testing these variables, Thomas. Just because one technique worked for somebody else doesn’t mean it will work the same for your customers and products.
Quick question Roger: if the MSRP for a product is $4.99 but that price is not on the bag but rather on the grocery shelf (as in a supermarket format), should changing to ‘$5.00’ make no difference or theoretically help sales based upon the above observations of price? Thanks so much!
Hi, Scott, I can’t say for sure but my guess is that the price location isn’t that important if the consumer sees it at the point of making a decision. Good question!
Nice article Roger! I think you should also include the geography where the numbers could use, for example 8 is better that 7 when it comes to chinese. Could you confirm this?
I think this article could also complement this article 🙂