As a Pricing Geek, one of the things I look forward to at this time of year is how much all the gifts in the song “The Twelve Days of Christmas” will cost. PNC have been calculating cost of this basket of goods (all the birds, the milking maids, the ladies dancing, the leaping lords, the pipers and the drummers) for 38 years now, and their website tells me they are currently crunching the pandemic adjusted prices for 2022. Given that it’s going to be a price-sensitive Christmas, I thought I’d devote some column space in this month’s eNews to a couple of ways to make your prices seem more affordable this Christmas (or any other time of the year for that matter).

Tip #1

Take a look at the following four prices. They are identical, right?

• Price #1 – $1,567.00
• Price #2 – $1,567
• Price #3 – $1567
• Price #4 – 1567

Yes, the four prices are identical, BUT you, and your customers, will perceive price #4 to be cheaper than price #3, which is perceived to be cheaper than price #2, and so on. Try removing what I call the “pricing punctuation” (the dollar symbol, comma’s and decimals) to create cheaper perceived price points. Another way to lower perceived price points is to minimise the number syllables in your price points.

• $1,117 (“one-thous-and-one-hund-red-and-seven-teen”) comprises 8 syllables (nine if you say ‘dollars’), but
• 1090 (pronounced one-thous-and-and-nine-ty) is just 5 syllables (or just 4 if you say “one-o-nine-o”

The less syllables, the cheaper the brain will perceive the price point.

Tip #2

Let the customer know they are getting a deal. The price of the two dresses shown below are identical. But more customers will purchase the dress on the left because they can see they are getting a deal. Customers love the thrill of the hunt (finding a dress with $40 off) and the thrill of the kill (making the purchase, which them gives them bragging rights).

You can read more about making prices appear smaller or less relevant than they actually are, as well as the role pricing can play in your branding, in this Harvard Business Review article Talking to your Customers About Prices. Oh…and one more thing. If you were subscribed to the PricingProphets Newsletter, you would have read this on the 17th October 2022.