Wednesday, May 8, 2013

Does Pricing affect Sales?

Many of us have all seen the typical $9.99 price on items, but what researchers have shown is that this type of pricing tends to sell more often. Neuromarketing has shown that items that are priced just under an even amount sell more of that item, in example $9.99 or $497.95 rather than $10.00 or $500.00. Big companies and marketers like Neiman Marcus, Nordstrom and Sears have spent money testing the pricing therapy to see if slight savings (a few pennies or a dollar) would impact substantial sales, and the result is YES! 

One of the studies researched was for real estate pricing. Studies showed that houses priced with an odd number, Roger Dooley's example of $494,500 rather than $500,000 would sell at closer numbers to their asking price then the even numbered price. 

The keys that research has shown is that:
  • Consumers respond better to numbers that are odd rather than even
  • Avoid round numbers, an item priced at $499 will sell more than at $502.50 even though the difference is slight
  • Consumers shown items without dollar signs or decimals spend significantly more ($12.00 compared to 12)

No comments: