price

Should you lead with price? Or should you describe the product first, and then show the price?

There’s now an answer to this long-running marketing question, and it comes via a study using the tools of modern neuroscience.

Have you ever wondered why customers say they buy your products based on price - and then, in the end, they also stop buying because of price?

What's that phenomenon all about?

Want to make your prices seem lower without actually changing them? I’ve got a research-based technique that will do exactly that, with one small catch: your prices will only look lower to your male customers.

If you have an ecommerce site, how often do customers visit – often after a costly paid click – and end up leaving without buying? Are abandoned shopping carts all too common? Or, if your customers visit your retail store, how often do you see them compare several items, only to buy none of them and move on? If you stock similar items (and who doesn’t?), the problem could be your pricing.

In a recent post, I wrote:

“Bob Thompson shared the results of research he had been involved in some years ago. When customers were asked what constituted ‘customer-centricity’ they came up with: product quality/fitness for purpose; customer service excellence; being treated fairly; and price. Bob made a big play, as do others, about price only being fourth on the list. I will be writing a post on the price myth soon.”

How you pay – credit card vs. cash – actually affects how you think about the products you are buying, according to new research published in the Journal of Consumer Research. That, in turn, means that marketers need to review how they are marketing to credit and cash customers.

Every merchant seems to have a loyalty program these days. It makes sense to reward customers for their patronage and encourage even greater frequency. But, it appears there’s one kind of loyalty reward that may be more effective. One study showed that “irrelevant information” (in this case, largely valueless loyalty points) changed consumer buying decisions.

Book Review – The Price of Everything: Solving the Mystery of Why We Pay What We Do by Eduardo Porter

Looking for more novel pricing strategies for business, I picked up a copy of The Price of Everything by Eduardo Porter. Although I didn’t find much practical advice or directly applicable research in the book, some of the insights were quite fascinating. Porter examines the prices of things that we don’t normally associate with being for sale – women, votes, culture, and lives, for example.

When recession hits, pricers seem to grab onto a couple of tools: how soon to discount, and how much? It seems more risky to use other pricing approaches in bad times than in good, but, as authors Marco Bertini and Luc Wathieu point out in the May Harvard Business Review (”How To Stop Customers From Fixating On Price“), smart pricing strategies can also serve to remind customers about things other than a product’s… well, price.

Companies that have discounted in response to the Great Recession now find themselves in the position of needing to find a way to return prices to something closer to “normal,” whatever that is. Those companies have gotten some good news and bad news in the form of research from Michael Tsiros of the University of Miami and David Hardesty of the University of Kentucky, as reported in the April Harvard Business Review.