pricing strategies boot camp session 1
TRANSCRIPT
PRICING TECHNIQUES BOOT CAMP
Copyright Spring into SalesSession One
Session One
Introduction to Pricing Techniques Why display pricing What happens if I remove the $sign Rounding prices How can I increase sales tomorrow Hot Seat
Introduction
Neuromarketing Science of Shopping
Pricing
Show your prices
Women won’t ask Men get mad
Do $ signs make us spend less? Cornell University StudyChicken Pie $10.00Chicken Pie 10.00Chicken Pie Ten dollars
Relationship between money imagery and selfishness
Session One
Introduction to Pricing Techniques Why display pricing What happens if I remove the $sign Rounding prices How can I increase sales tomorrow Hot Seat
What happens with rounded prices
Notepad priced at $20.00
Perceived value might be
$20$19
Notepad priced at $19.95
Perceived value might be
$19.75$19.50
What about high priced products University of Florida Study 5 year study, Florida, Alachua County $500,000 $494,500
Sold more quickly Closer to original asking price
How we weigh prices Mental measuring stick Based on initial price Increments We want a fair deal
Session One
Introduction to Pricing Techniques Why display pricing What happens if I remove the $sign Rounding prices How can I increase sales tomorrow Hot Seat
Rounding or Precision Pricing
$29.99, $30.00 or $29.88
Schindler & Kibarian Study, University of Pennsylvania
Effect of Odd Pricing
Catalogue One
Was $30 now $24.00
Catalogue Two
Was $30 now $23.99
Catalogue Three
Was $30 now $23.88
3x30,000 = 90,000 catalogues. 6 month study.
Number of Purchasers per catalogue
Surprised?
More people made purchases
0.88 0.99 0890900910920930940950960970980
923
968
921
Purchases
Spend per person per catalogue
Surprised?
Higher spend on the $.99 ending prices
0.88 0.99 0$76.00
$77.00
$78.00
$79.00
$80.00
$81.00
$82.00
$77.68
$80.91
$78.75
$ spend per person
Sales revenue per catalogue
Surprised?
Better revenues
0.88 0.99 0$68,000
$70,000
$72,000
$74,000
$76,000
$78,000
$80,000
$71,699
$78,317
$72,529
$ Sales volume
What does this all mean? 5.1% increase in number of people who
purchased 2.7% increase in $ amount 8% increase in total revenues
$2,000 per order/event10 orders/events per year$20,000 @ year = $1600 increase
Why is this happening? Underestimation Mechanism
Process left to right $29.99 = $29 $29.99 = $20
Association Mechanism $x.99 = sale = bargain?
Session One
Introduction to Pricing Techniques Why display pricing What happens if I remove the $sign Rounding prices How can I increase sales tomorrow Hot Seat
HOT SEAT