Market Prices

During economically troubled times you cannot miss the vast amount of price discounting and “special offers” which retailers and online stores use in a bid to tempt people to buy. With businesses themselves facing difficulties, they do almost anything to get more customers and people buying more. But sometimes the sales promotions do not live up to the desires of the company; often consumers just walk on by, ignoring the “deal”. Part of the reason for that appears to be in the way the offers are made.

Consider cans of beans where you are offered “two for one” or “buy one get one free”. You can quickly and easily divide the price in two and work out the cost of each individual can. But if the deal is “three for two”, the mathematical calculation is now more difficult. However, it seems that makes many people give up on the potential purchase because they feel the retailer is trying to hoodwink them, making the price calculation deliberately tough.

Psychological research on consumers shows there is another way to increase sales. What you do is give the quantity first and then the actual price amount afterwards. So instead of saying “three for two” your sales display says “three for £10”. The math is a little difficult as it is not a round number, but people realize that each item us roughly £3 each. However, if you were to say “£10 for three”, research shows that people are less likely to buy – putting the price first is off-putting, even though the deal is the same.

Online you can use this technique in a variety of ways. Imagine, for instance, you sell e-books and you have a “package deal” for 10 books in a collection. If you say “£47 for 10 books” you will get fewer sales than if you were to say “10 books for £47”.

Similarly, if your shopping cart allows people to select multiple copies of something – such as products you might deliver to them – do not allow your shopping cart to put the price first; it should display the quantity first, then the price. That way you’ll reduce the likelihood of shopping cart abandonment – which happens in almost 50% of all online carts. Half of online shoppers decide they want to buy something and then, at the last moment, change their mind. You can help reduce that reversal of your fortunes by presenting the price information in the right way.

What the research shows is that people focus on the first number they see. If that is a high price figure, such as £27 for three items, they perceive it as expensive, even though the items are only £9 each. If they see the “3” first, the package deal is perceived as valuable because of the low number.

If you want more sales, or if you are in economically troubled times, the way in which you display your pricing information could have an impact.

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