For Sale! Prices Slashed!! Marked Down!!!
People have used many of the same tactics for centuries to focus potential customers on the value they’d receive if they were to buy now. But here is a question for you:
Would your customers rather a product be marked down from $203 to $192, or would they prefer a markdown from $199 to $188?
Either way you slice it, they get an $11 price reduction. For you, it changes your final price from $188 to $192. Four dollars more for you sounds better and, believe it or not, customers perceive they’re getting a larger discount at the $192 price point. This is definitely an area that many more retailers need to test regularly.
A recent Journal of Consumer Research paper examined the notion that responses to pricing differs based on the right-hand digits in sale price figures. In fact, participants reacted as though low digits were farther apart than higher ones as well as they were about 20 percent more likely to actually buy.
Are you slashing prices so low that it is “insane“? Are you not getting the best possible effect from your discounting? Do something about it.
