Move the Customer to Accept Higher Prices

To decide if a price is high or low, shoppers will set in their mind an anchor for what they consider to be a medium price. Often, the shopper does this subconsciously. If it is to our benefit and the benefit of the customer to have the customer purchase a higher-priced item in the product or service category, move the anchor point higher:

• With product categories like linens where there are many brands and many choices from each brand, group items with similar features together rather than grouping items from the same brand together. Stanford University researchers found that shoppers exposed to feature-based groupings were less likely to want to purchase lower-priced items.
• Introduce a higher-priced version of the product. Some of those same Stanford University researchers found that when a higher-priced alternative is added to the list of choices, the alternatives which cost less become more attractive to the shopper. Soon after retailer Williams-Sonoma added a $400 bread-making machine to their merchandise line, sales of the $275 unit doubled.
• When presenting prices to the customer, start with the highest and end with the lowest. Researchers at Hong Kong University of Science and Technology had participants rank prices of hotel rooms. Some were asked to rank from highest to lowest. Others were asked to rank the prices from lowest to highest. After completing the task, participants were asked to say how much they'd pay for a hotel room. Those who had ranked prices from highest to lowest were willing to pay an average of $19 more than were those in the lowest-to-highest group. The first group also estimated the average price of a hotel room to be higher.

     These work best when the shopper is busy and is taking lots of information into consideration before buying.