Friday, February 25, 2011

Number Costs and Benefits for Desired Effects

The way in which you state numbers to a shopper influences their purchase decisions. When deciding which measuring stick to use for the numbers, consider what fits your business ethics and how to best highlight selling points.
  • Larger numbers can make a benefit sound better. Researchers at Ghent University in Belgium and Tilburg University in the Netherlands asked consumers to compare the advantages of a seven-year warranty and a nine-year warranty. To one group, the duration was stated as seven years compared to nine years. To another group, the identical duration was stated as 84 months compared to 108 months. Those consumers presented the months figures saw the difference between the warranties as larger than did the consumers hearing the comparison in years.
  • When resources are stated as larger numbers, consumers are more willing to take risks in their expenditures. Researchers at INSEAD-France, INSEAD-Singapore, and University of Toronto found that international travelers were willing to gamble almost twice as much when the currency in which they placed their bets produced face values that were 100 times as much. This might occur when the bets—or merchandise prices—are stated in Japanese yen as compared to U.S. dollars. In a retail store, it could occur when frequent buyer points are awarded in units of 100 instead of single units.
  • Statements in unexpected units increase the consumer’s interest in understanding reasons to make the purchase and distract the consumer from thinking of reasons not to buy. Researchers at University of Cincinnati, University of Indiana, and University of Twente told study participants that a candy bar would cost 100 cents, membership in a student interest group would cost 300 cents, and a tuition increase of 7500 cents was slated. The participants given this information, rather than the amounts in more conventional dollar figures, became increasingly anxious to make a purchase decision and increasingly certain of any positive judgments of the product, activity, or cost.
  • Prices written out as words are seen as lower than prices stated in dollar figures. Similarly, researchers at HEC Paris and University of Pennsylvania found that a price stated as “one forty-eight twenty nine” sounds higher than the same amount stated as “one hundred forty eight dollars and twenty nine cents.”
     But an important point to note is that after consumers are educated about these cognitive distortions from the measuring stick, the effects fade substantially.

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

Click below for more:
Have Discounted Prices End in $1.99 or $2.99
Give Shoppers a Comparison Point
Present Warranties as Insurance, Not Assurance

No comments:

Post a Comment