Monday, June 3, 2013

Home In on a Range

Generally, your shoppers prefer an exact estimate to a range. When they ask the price of an item, they’d be put off if you replied, “Hmm, for one, it’ll cost you somewhere between $3.00 and $6.00.” If you’re talking about the time for a service call or item delivery, the smaller the appointment window, the happier the purchaser will be.
     Still, there are circumstances in which consumers respond better to a range. Researchers at Washington University in St. Louis and Florida State University found that people aiming to lose weight remain more engaged in a program when the objective is stated as “lose between four and six pounds this next month” than as “lose five pounds this month.” A range also worked better when the objective was to save money during a specified period.
     Three forces are in play:
  • Attainability. People reject objectives they view as outside reasonable reach for them. The lower number in the range serves as a hook. 
  • Challenge. Goals which require an effort will excite people, and excitement leads to engagement. The higher number in the range provides the challenge.
  • Self-efficacy. When people achieve an objective they’ve set themselves, they feel more confident in setting subsequent objectives of the same sort. The width of a range increases the likelihood the objective will be met. 
     Although the range can be wide, consumers will home in toward an exact estimate as they progress. This also happens, upon store arrival, with “tensile pricing.”
Consumers are, by and large, an optimistic lot. If you advertise “Save 20% to 45% off regular prices,” the consumers will tend to think the item they’re seeking will be one of those tagged for the maximum discount.
     The power of tensile pricing to pull in customers depends on what’s being discounted and how you promote the price discounts.
     Tensile pricing could present an interval (“Save 20% to 45%”), a minimum (“Save at least 20% on every item in stock”), or a maximum (“Save up to 45%”). Research finds that the maximum format usually draws the most shoppers. If you do use the range or minimum formats, make the minimum at least 15%. If you’ve a limited number of products for which you’re offering promotional discounts, tensile pricing will draw more customers than would ads showing the specific discounts on the limited items, according to research at Yale University, Ohio University, and University of Toronto.

Click below for more: 
Advertise Tensile Pricing Selectively 
Enrich Clients’ Savings Deposits

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