Monday, October 12, 2009

Ease Customer Pain About Item Prices

If your shoppers are like most these days, they're paying especially close attention to paying. Here are a few more tips for easing your customers' pain about item prices:
  • The tactic at the top, the single most important one, the one that is in fact essential is to be sure that the items you sell are perceived by shoppers as delivering value for whatever they pay.
  • When possible, present items as collectibles or as gift items. Shoppers lose price sensitivity when purchasing collectible items, and they're willing to spend more on gift items, even when the gifts will end up being given to themselves.
  • Encourage credit card payments. People feel less pain when paying the same amount by credit card than with cash. This effect appears to be less powerful with payments by debit card, though.
  • For cash purchases, give change in smaller bills unless the customer asks otherwise. University of Iowa research suggests that when your store is associated in consumers' minds with small denomination bills, customers are more willing to spend their money with you.
  • And here's the oddest one of this set, so I saved it for last: If it looks to the salesperson as if the customer doesn't want to think about the price because it's painful, avoid mentioning the price, but if asked, say the price slooowly. I'm serious. Researchers at HEC School of Management, Paris and at University of Pennsylvania find that this makes the shopper less sensitive to the price. So if the price is $148.29, instead of saying "one forty-eight twenty nine," say, "the price of this item is one hundred forty eight dollars and twenty nine cents." Maybe this tactic works because you don't notice the sour taste of the medicine when it goes down slowly.

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