Customers Mentality Boggles Me...

[Patrice]

Hi everyone.

It's been a while since i did not post anything. As the old arabic saying goes: If what you have to say is not more beautiful than silence, then shut up. ;-)

I will be attending a horse rally event (150-250 peoples) this weekend as is it a holyday monday here in Quebec. I will be showing my leather products and do a demonstration on leatherworking.

As i was tagging the price on my hand made item, my girlfriend and my mom (both avid shoppers) tell me not to tag 60$ but instead, 59,95$. It's seem that it's due to extensive marketing research and that 59,95$ is not on the same braket price as 60$.

Is it just me, or i just underestimated the power of a nickle? Are people really more tempted choosing a 5 cents cheaper item? Is it the same in USA?

Just between you and me, i was upset. Upset because so many people are not willing to craft their own belt, wallet and other gears, BUT, they will not buy good quality items.

I would like to read what you have to say about it and if the same thing keep running in your mind.

And please excuse me for the ranting.

Have a great weekend.

Edited May 16, 2014 by Patrice

[Hi Im Joe]

Hi everyone.

It's been a while since i did not post anything. As the old arabic saying goes: If what you have to say is not more beautiful than silence, then shut up. ;-)

I will be attending a horse rally event (150-250 peoples) this weekend as is it a holyday monday here in Quebec. I will be showing my leather products and do a demonstration on leatherworking.

As i was tagging the price on my hand made item, my girlfriend and my mom (both avid shoppers) tell me not to tag 60$ but instead, 59,95$. It's seem that it's due to extensive marketing research and that 59,95$ is not on the same braket price as 60$.

Is it just me, or i just underestimated the power of a nickle? Are people really more tempted choosing a 5 cents cheaper item? Is it the same in USA?

Just between you and me, i was upset. Upset because so many people are not willing to craft their own belt, wallet and other gears, BUT, they will not buy good quality items.

I would like to read what you have to say about it and if the same thing keep running in your mind.

And please excuse me for the ranting.

Have a great weekend.

On an unrelated note....its hilarious how close that arabic saying is the golden rule. "If you don't have anything nice to say, don't say anything at all."

[oltoot]

I have dealt with multiple frustrations over the years but have refused to knucle under in this area. I HATE $19.99 instead of $20 mentality. I have always kept my prices at full $ increments and on larger items, strive for $5, $10, $25, $50 increments. It is only with collecting sales tax that a sale comes up with pennies.

[DavidL]

Its more psychological than anything. 97.50 feels cheaper than 100 even though its only 2 dollars and fifty cents. People categorize these things in their head, in this case 97.50 your item is under 100 dollars. Value of currency also takes a roll if an item is 19.99 or 20 then people will say I can buy this with a single 20 dollar note, although its not a deal breaker to price 23 dollars.

For trade shows a round number won't make that much of a difference and I would go with a whole number since it isn't a retail store environment. Pricing at a whole number gives off that the product is good quality and is not an item that is expendable. For instance any high end boutique store for men or women majority of the time don't advertise the price on the wall and prices always ends in a whole number. Same goes with cars.

Another study also shows that if an item is priced low enough (under 30) whole numbers like 10, 15, 20, 25, placed at the front of the store (where retailers placed most of there clearance/ on sale items) will give off the feeling they are on sale, even if regular price was 9.99 and you sell for 10.

You will mostly deal in cash so I would go with 20 dollars instead of 19.99.

[humperdingle]

It's an old Jedi money trick :D

$59.95 in the eye of some shopaholics makes them assume the item is closer to $50 than $60.

Therefore, if they buy, say, five items at that price, their brains will tell them they've spent $250 and not $300

A virtual saving of $50!

Smart shopping

[Denise]

Make it $59.98. That way, being as don't have pennies up here any more, you don't have to deal with change, but people still get the psychological boost from getting a "cheaper" product. I think it does work. When we go by gas stations and the price is $129.9 a litre, we say "it's $1.29" rather than "it's $1.30". So I think it works - a little anyway...

[Chief31794]

I've always priced at $XX.99, course I got an MBA and had to learn a lot about marketing. If this technique was not effective then every retailer in America and I assume Canada wouldn't use it. You will not find much merchandise in a retail store that is an even dollar amount. Cars are priced at $XX,X95.00 because $29,995.00 seems a lot better than $30,000.00 It is just human nature that 29 thousand XXX sounds better than 30 thousand dollars.

Just my 1.99 cents worth, I could be wrong that happens a lot lately.

Chief

[Hi Im Joe]

I see what you did there Chief! LOL.

Just my 1.99 cents worth, I could be wrong that happens a lot lately.

Chief

[Chief31794]

I see what you did there Chief! LOL.

I didn't think you guys would buy it if I said it was my 2 cents worth. LOL

Chief

[WyomingSlick]

LOL This topic is an example of one of the reasons that I find the range and scope of human behavior as the most interesting subject matter I know of. The ways that people's viewpoints/ideas/thoughts are shaped by their culture, their education, their religion, their family, friends, and the multitudes of other inputs that go into making them a distinct individual is sometimes incomprehensible to those who don't share the same data set of influences and/or the same tendancies to accept, or......... reject beliefs and facts.

The "pricing game" is just an example of how merchandisers picked up on a bit of human psychology to increase their sales, and it has been around for a very long time. Even though the value of a penny is so trivial these days, the psychology still works.....so is still being used. The range of strategies that sellers use is a very broad spectrum and there are many tried-and-true techniques that are effective.

And then there are the behaviors that we do ourselves. I have observed people who buy alcohol/beer/cigarettes.......who will buy only a pack, or sixpack. or small bottle.......and then buy another the next day, (or sometimes the same day) when the most cost effective way would be to be buying a case, a large bottle, or a carton. LOL I guess they are just in denial, or they have a faint hope that they are moderating their intake that way. On the other hand, I know a fellow who buys his Canadian whiskey by the box because he gets a dozen 750ml bottes for the price of 10. He's a realist alcoholic !

By the way, I am an addict myself. But, I am also a realist. So I buy my Mountain Dew in bulk, and on sale whenever possible. And my pickle relish. LOL

.

[biglew]

when I sell non leather items on ebay I use crazy prices.... like 63.37 or 9.22 ... 19.42

Just to make people think....

[Jeffrey46]

I've been in retail since my late teens (think parachute pants and hair bands) and there are many studies that have concluded the .95 or .99 price point does have a beneficial affect on shoppers. Some of the price points you see in stores are codes. For example at one national retail chain in the US, the price point of .95 tells the clerk that the item is on clearance and cannot be re-ordered.

That said, price your goods as you see fit. They are worth it.

[Patrice]

Thank's everyone for your thoughts.

It was very interesting reading all of you!

[oltoot]

I didn't say that 9.99 isn't more attractive than 10.00 just that I refuse to play the game. I might feel different if I were selling hardware or toys or cell phones but I'm just greatful that I'm not.

[dirtclod]

All of my prices end in even amounts like 50.00 . Because if i'm selling some place on the road and most of my sales are on the road i don't want to carry a bunch of 1's or change.

[Dwight]

First off, . . . I don't do many shows, . . . and not a lot on Ebay or Gunbroker or other sites.

But when I do, . . . I keep it simple both for me and for my customers.

Internet sales always have the statement in there: Free Shipping or Shipping, Handling, & Insurance included in price. I like to buy that way, . . . others do too, . . . so I use it as an inducement to buy my product as opposed to the other guy's where those are additional charges.

At shows, . . . it is an "all inclusive" price, . . . high enough that I can go home and figure out how much to set aside for sales tax and still make a profit, . . . as well as high enough to also offer the free shipping for mail order customers who want to order something at the show, . . . and yet I keep my prices at even dollar amounts.

Why do I do this? I'm lazy, . . . admittedly, . . . and I'm not carrying a bunch of change and making change for tax, shipping, etc.

My customers are intelligent discriminating adults, . . . I treat them that way.

May God bless,

Dwight

[billybopp]

When I was a wee lad, I went to the store one day with Dad. I noticed an end cap display with a $9.99 price on the sign, and asked him why it was so. His reply was "To me that's $10. To your mother it's $9." and then just laughed. Y'all just gave me a chuckle as I remembered that.

[George B]

I do a lot of gun shows in a couple of states and am no longer surprised at what customers can or cannot figure out with pricing.

I do all my pricing at dollar amounts, no cents involved. Guess you could say no sense involved as well. For me its a matter of carrying around change, dollars are my smallest change and I figure if the difference between $0.99 and $1 throws them off I am probably better for it.

I do figure in, that most of my gun show customers are going to beat me up for a discount. I will normally discount it the amount it would cost me to sell it on ETSY or EBAY and round it off on the dollar.

So far it has worked out well for me.

[rejerome]

Interesting topic.......I have to shake my head every time I fill up with gas.....9/10 of a cent....?

How my drops of gasoline adds up to 9/10's of a cent?

"Fill'er up sir? No, just give me $20 and 9/10 of a cent worth please."

Oh wait, there are no stations with full service fill ups....silly me....LOL.

[billybopp]

I was told long ago that the 9/10 cent on gasoline was there by law in order to let you know that federal excise taxes are included in the price.

[rejerome]

Yup, I believe that is correct on the 9/10ths but there's a sticker on every pump in the USA that reads that there are federal taxes included in the price of the fuel.

And....today the fine folks that brought you that 9/10ths are now debating the notion of adding another 12 cents. Really, 12 cents? In the spirit of this thread lets get to even money and add on either a dime, or a nickel and a dime, or a quarter....LOL.

On the 9/10ths you're missing my point, I feel the same way as the originator of this discussion, pricing down by a few pennies (or tenths of a cent) to make the price look more appealing seems a little silly but there apparently is a large portion of the population that feel better about products that are priced way. Virtually all retailers price things that way. Wal-Mart would have to go out of business if prices could no longer end in a "9", LOL.

Maybe I'd feel differently if a few pennies were actually worth anything these days, hence the debate of discontinuing the production of pennies. I doubt pennies will ever go away in my lifetime.

Again, interesting discussion.....and I'm not trying to start an argument or disrespect anyone. just enjoying the conversation.

Peace....

[Denise]

In Canada, we have done away with pennies. A penny cost more than a penny to produce so the government called it quits on them. But things are still priced at 9.99. Then they round up or down to the nearest nickel - if you are using cash. If you are using credit or debit, it goes on as 9.99. The mental game continues...

[rejerome]

Yup, same in the US. Currently a penny costs 1.83 cents. I think I should move to Canada....a government that thinks logically....haha...