Business advice
Business advice // Hayley Simmons Sale-ient points
When presenting quotes to customers, have you ever considered how the psychology behind your pricing could be infl uencing whether you close a sale?
T
he way you present your prices can significantly influence whether a customer views their investment as a wise choice or a daunting expense.
As consumers, we need context to evaluate
‘value for money’. Big purchase decisions aren’t made entirely rationally; instead, we rely on emotions and mental shortcuts. Price anchoring is a technique that occurs when
customers are exposed to an initial price that sets a reference point (or anchor), influencing their perception of subsequent prices. For example, if a high-priced option is presented first, other prices may seem more reasonable by comparison. The application of this is well suited to
kitchens. You could try this by recreating the same design as closely as possible but with 3 tiers of specification, broken down by door choice, cabinetry, appliances and worktops. The middle option, framed by an entry level and more luxurious option, will often appear to be the most balanced and reasonable choice. By presenting options this way, you make it
easier for the customer to make decisions. We naturally expect higher-quality products to cost more, and by transparently showing the quality trade-offs against price, you build trust and confidence in how the budget is being allocated. Also, most of us know that prices ending in 9
(e.g. £9,999 instead of £10,000) are perceived as being significantly lower, even though the difference is minimal, but did you know that the visual length of the total price can also have the ability to impact our perception?
Additionally, instead of applying a discount
across the total price, consider weighting it on specific products. This can be particularly effective if there’s an item the customer is especially price- sensitive about. For example, if the customer has chosen a more
expensive paint-to-order colour or a bespoke cabinet solution, you could clearly present this as a complimentary upgrade. Appliances are already lower-margin items
before being discounted, but they do have clear and comparable value in the marketplace. Offering a ‘bundle’ discount or a free upgrade to a more premium brand may be perceived more favourably than a flat percentage, or just deducting the same value from the cabinetry, which is difficult to compare. These are tactics commonly used by car
£15,878.99 would be perceived higher than £15879. By removing the pence and commas, the price appears smaller, which research shows is subconsciously associated with being lower.
Deducing a discount Most retailers I work with do apply some level
of discount to a quote, sometimes applied somewhat arbitrarily to hit a certain total price. However, there are ways to make the same discount feel more valuable without changing the actual numbers. One way is by displaying the discounted price alongside the original price, with the original crossed out. This makes the discount more impactful than simply showing a lower net price.
dealerships for good reason – such discounts feel more tangible, legitimate and valuable on a big- ticket purchase. While some of these principles may seem like simple common sense, in a market where pricing is a major pain point for customers, it’s important for retailers to go beyond just the numbers and focus on how to clearly demonstrate value and instill confidence. If we were purely rational beings, only the actual price would determine whether a customer buys. However, the reality is that we’re emotional creatures making emotionally-led decisions – especially when it comes to something as personal and expensive as a new kitchen or bathroom!
kbbr
Do you have some sage business advice you want to share with the industry? Email
editor@kbbreview.com to be featured in a future issue
50
kbbreview
November 2024
iStock.com/mgordeev
£8,000
£7,999
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68
