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Automatic Triggers, Fixed Action Patterns and Odd Number Pricing. Turning Browsers into Buyers

Posted on | June 16, 2008 | No Comments

by Tom Polanski

Recently, I came across some information about pricing. Researchers at Cornell University believe you’re better off pricing your products with an odd number than with an even number (for example, $39.71 vs. $40.00).

The researchers found that odd numbers cause buyers momentary confusion. Confused, people fall back on associations. And people associate odd numbers with discounts. Hence, odd numbers in a listed price equal a discount.

The Cornell report caused me to think about automatic triggers. This is a term I first came across in an enlightening book written by Robert Cialdini, Influence: The Psychology of Persuasion. A must read for all marketers. The premise is that we’re all inundated with too much information, that we suffer, to different degrees, from a form of cultural ADD and that we fall back on automatic responses.

Cialdini uses a friend as an example. This friend owned a jewelry store. She tried several sales techniques to get her products moving. She shifted the location to a central display area. She told her staff to push the products. Then, finally, before leaving on a buying trip, she left a note instructing the manager to mark everything 1/2 off. When she returned, she wasn’t surprised to find that those products had been sold. What surprised her, shocked her, really, was to discover that the manager misread her note and instead doubled the price of the jewelry. Everything sold at twice the price.

What happened is that the customers, mostly affluent vacationers who knew little about turquoise and jewelry, using a standard principle, an automatic trigger, to guide their buying decisions: expensive = good. These fixed-action patterns involve intricate sequences of associations and behavior. They wanted good jewelry and saw the turquoise pieces as decidedly more valuable because they cost more than comparable pieces at other stores when nothing was enhanced but the price.

The price became the trigger for quality.

However, before we judge those customers too harshly, how many of us have been raised with the rule that you get what you pay for? And, often, this rule proves to be reliable and true. So, instead of doing the research needed to become jewelry experts, which is too time consuming, these customers, defaulted to automatically, unconsciously, determining value by the price. These patterns are, in most cases, lead to a higher degree of efficiency and are often times necessary. But, sometimes we end up paying too much for jewelry.

On the other hand, we respond more often than not to the lowest price = good deal equation. Oscar Wilde reportedly said, ìThe cynic knows the price of everything and the value of nothingî. In a sense weíve become a nation of cynics because weíre price driven. But what price do we pay for that low price?

One of my peers only shops at a premier and very expensive retailer. I asked him why he did so when the same items could be found elsewhere for less money. He replied that his time is valuable. He didn’t want to waste it driving around trying to save a few bucks since that time could be spent generating money that would amount to far more than he would save. He continued that he knows he’ll always find high quality clothes he likes at this particular retailer, that he’ll work with the same salesperson he’s always worked with and that he’ll receive the highest level of customer support. Looked at from that perspective, it makes sense to pay more, doesn’t it?

Our agency has lost business to competitors who offered lower pricing. Sometimes those advertisers will come back to us month’s later, hat in hand, with stories about account management turnover, poor support, slow set-up, slow response to e-mail and phone calls and, ultimately, lost revenue. Yes, our rates are higher than other companies but the value we offer is real, clearly seen, and always delivered. Our clients find the highest quality solutions offered and supported by a staff that has been together for years.

Finally, because prices usually end with a five, a nine or a zero, I think, it might be worth testing pricing that ends with the other odd numbers. It certainly would be out of the norm and may increase conversion rates if the Cornell study is accurate. At the very least it could increase stickiness to an e-commerce site and may well be an effective branding tool. The site with the odd pricing.

In closing, try to be aware of what your first impulse is when someone ends a sentence with the words like ‘right’ and ‘okay’. If you’re like the rest of us, you first reaction will be to agree. That’s an automatic response to a trigger.


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