Buy me: The psychological tricks that make us click

Pricing tactics

Many of the leading retailers are highly price sensitive. Amazon can change the prices of key products several times a day if the spiders it has crawling other websites detect a cheaper price on a significant competitor. However, merely having the cheapest deal for price comparison engines isn’t the only factor that online retailers take into account when setting prices — there are some surprising psychological tricks being deployed, too.

Buy me: The psychological tricks that make us click

Psychological tricks that make us click - pricing

Most buyers have got wise to the old trick of ending every price with .99 to fool them into thinking it’s cheaper, but even knocking just a couple more pence off can be enough to boost sales. “You see online lots of prices ending in seven,” says Graham Jones. “When you sell at £9.99, you don’t sell quite as many as you do at £9.97. It appears that extra couple of pence makes people think it’s cheaper.”

It’s not the only trick the brain plays on shoppers that retailers will exploit. “There’s evidence to suggest that the longer it takes to say the words in the price, the more expensive we think it is,” says Jones. “On television, those adverts for the latest sales at DFS, won’t say this is six hundred and ninety nine pounds, they’ll say this is six-nine-nine. They [online retailers] will all be looking for ways to reduce the number of syllables in a price, because when we read it, were hear it in our heads. We need to ‘hear’ those prices in as short a time as possible.”

That same principle can be used to put a more effective spin on sale offers, according to Natalie Nahai. Our brain processes numbers more quickly than it does words, so websites will generally do better when advertising goods as “50% off” rather than “half price”, “two for the price of one” or “buy one get one free”, simply because it takes our brain longer to process the words and, as well all know, the internet reduces our attention span to that of a toddler in a toy shop.

Even the order of the numbers in a price can affect our perception of value, according to Jones. Numbers presented in descending order appear cheaper than those that ascend. “If you’ve got something at £567 we perceive that as considerable more expensive than £543,” says Jones, even though the difference is marginal.

Retailers can also use pricing to push us towards certain products that they want to clear from stock. In the same way that inexperienced wine buyers will always go for the £8 bottle of plonk, because they don’t want the cheapest, but not the most expensive, either, retailers can play similar tricks with the presentation of goods. If given the choice between, say, two televisions on a website, most people will gravitate towards the cheapest. But if those televisions are presented in a tier of three options at a range of prices, “the one you actually want people to buy ends up as the middle option,” says Emma Travis, because you’ve recalibrated people’s perceptions of value.

Sometimes, however, retailers have to rely on pure data rather than psychology to work out how to set their prices, with customers often used as guinea pigs. Different pricing tiers are commonly used for the sale of services such as online storage or software, where you might get “basic”, “pro” or “enterprise” accounts. The benefits of these different tiers are often presented as tickboxes of different features, and Travis says sites will often experiment with different variations of the offer to work out which features are the ones customers are most willing to pay for. She reveals how one of her company’s clients tested eight different variations of a feature table on their site, the winning variant recording an 185% uplift in conversions. “There would have been no way we could have worked out through psychology which of those benefits would have triggered that customer,” says Travis. “It was only through testing, with them actually seeing those different things laid out in a table, that we were able to see which one tipped them over.”

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