Move Shoppers Beyond Fixating on Price

Are your shoppers getting stuck at the point where they look at the prices of items? Are they failing to move beyond that point to even notice much about the other measures of value to them, such as effective life of the product and how well the product is customized to their needs and characteristics?
     Using results from their marketing studies, researchers at London Business School and European School of Management and Technology suggest four alternatives for grabbing and redirecting the shopper’s attention. Here is my adaptation of the four alternatives to the world of the retailer:

• Only pennies a day. State the price in terms of units of use. A tire retailer could state prices in terms of how much it costs per 1,000 miles. An insurance agent could point out that the superior policy costs only fifty cents per day more than the bargain policy. A related technique is to get customers thinking about how much money they can afford to spend in the long run. Researchers from Princeton, University of Chicago, and Digitas-Boston found that focusing on the long-term raised by about 35% the amount the shopper was willing to pay.
• You pay for quality. Catch the curiosity of the shopper by highlighting that the product carries a high price. Then say why. Research at INSEAD-Israel and at Stanford University confirms that when people buy products or services at what they consider to be unusually low prices, they tend to end up feeling that that the benefits are less than if they'd paid a higher price.
• A piece at a time. Partitioned pricing presents an item’s cost as a main price plus one or more additional charges. This highlights benefits. The London/European researchers give the example of IKEA charging separately for the table top and the table legs.
• Buffet pricing. Northwestern University researchers find that consumers are more likely to purchase certain types of items when presented with a group of similar alternatives all at the same price. The reason is that parity pricing—which is what this is called—eases the decision process. Parity pricing is most effective as a selling technique with items where the prospective buyer considers the purchase to be particularly risky. That might be because the buyer believes the price to be high, which involves financial risk.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Give Customers Long-Range Perspectives
Allow Modest Expectations of Discounted Products
Move the Customer to Accept Higher Prices
Use Partitioned Pricing to Highlight Benefits
Offer Customers Basics Plus Add-Ons
Use Parity Pricing to Help Customers Decide