Last week, I found that my favorite Italian place for lunch breaks introduced few changes to its pricing system. [1] My favorite restaurant changed its pricing system Now it is offering loyalty cards: after ten orders you receive the eleventh for free. But the loyalty card came with a caveat: prices went up from €6.00…
DetailsImagine you are selling delicious products such as potato chips. What would be the pack size you are offering? Small packs with 50 grams or larger packs with 200 grams each? Now – imagine yourself in the grocer’s aisle where these tempting treats wait for you. Which pack size would you pick? The larger one…
DetailsAnchoring belongs to the classic psychological pricing effects pretty much everyone knows: You expose customers to a random, uninformative number, and it still influences one’s price evaluation. High anchors make a price look more acceptable, low anchors bring your willingness-to-pay (WTP) down. Imagine you are driving to a car dealer. You give her/him all the…
DetailsNew year’s Eve is approaching. You decided to begin the new year with a new look… for your shop. During the first four weeks of January, you remodel your store and you are sure the new design will blow away your customers. You reopen your store in February and you closely monitor sales right after…
DetailsThe year approaches its end and the time between Christmas and New Year’s Eve seems to stand still. The perfect time for reading and inspiration. Hence, I invite all readers of the Handbook on the Psychology of Pricing to a new (the third) update. As usual, you can access it in your Readers Area. Enjoy…
DetailsThe holiday season comes with dinner invitations. It is pretty common that the guest gives as a gift a bottle of wine to the host as a sign of appreciation for the invite (at least I do – lacking of better, more creative ideas). The guest does not want to come across as cheap. What…
DetailsYou enter your favorite offline retailer and recognize a breeze of cinnamon and vanilla in the air. A feeling of warmth strikes you – it is Christmas times anyway. In the next aisle, you find the product category (e.g. pullovers in apparel) of your choice with premium and non-premium product options. How do you think…
DetailsLast week, we discussed that gift buyers become more loyal to the brand they present as a gift (see Nugget #11: Gift givers are a gift.). Gift buyers become more loyal – but what about their price sensitivity? Imagine you are buying a gift for your friend – let us say new headphones. You are…
DetailsXmas is around the corner. Imagine you are buying the perfect gift – let us say a lush beauty product – for your loved ones. How do you feel towards the brand? Now, assume you would have bought the same product for yourself and personal use. How do you think about the brand in this…
DetailsSome time ago you learned about a psychological pricing effect called “price-quality inference”. This phenomenon very much means: if something has a higher price, people associate a higher quality with it, which in turn justifies a higher price. For example – what do you think? Is a bottle of wine for $2.99 of the same…
Details
