As a follow up to my earlier post on pricing “tricks”, I wanted to share three more studies that focused on the visual characteristics of pricing and how it affects purchases.
1. Simple Prices
In a research paper published in the Journal of Consumer Psychology, researchers found that prices that contained more syllables seemed drastically higher to consumers.
Three pricing structures where shown to subjects.
The research revealed that the top two prices seemed far higher to consumers than the third price. This effect occurs because of the way one would express the number verbally: “One thousand four hundred and ninety-nine,” for the comma versions versus “fourteen ninety-nine” for the unpunctuated version. This effect even occurs when the number is evaluated internally, or not spoken aloud.
2. Dollar Signs
Prices marked with dollar signs have been proven to reduce consumer spending. A 2009 Cornell University study by RM guru Sheryl Kimes found that diners in upscale restaurants spent significantly less when menus contained the word “dollars” or the symbol “$.” Although the experiment was limited to lunch at one particular restaurant, they findings indicate that menu-price formats do influence customers’ spending, both in terms of total check and spending per cover.
3. Price Font Size
Marketing professors at Clark University and The University of Connecticut found that consumers perceive sale prices to be a better value when the price is written in a small font rather than a large, bold typeface. This finding can have a massive implication on the way hotels present promotional rates on their website.
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Robert Hernandez, Statistical Analysis and Data Mining for Revenue Growth Robert is an expert in the field of mathematical Hotel Optimization and Analytics. He has spent the last 17 years building data-driven forecasting and optimization models for companies in over 20 different industries, from tech to tourism. Robert possesses a very unique skill set including cross-disciplinary experience, advanced mathematical and analytics skills, data transformation, industry-specific knowledge and business-process improvement expertise. Robert began his career at the Walt Disney Company in Revenue Planning. Read More+