The Psychology of the Price Tag Label
There are myriad technologies out there that can help you to increase the sales of your business. If you’re old school, though, — or just can’t bother — you may have sworn off learning all that fancy schmancy tech stuff. So, in honor of the neo-luddite in you, we’ll explore ways to boost sales with only the most basic technologies, a price tag label.
To do that, we must delve into the psychology of the price tag label.
Charm Pricing With Price Tag Labels
Now, I’m sure you have heard of the benefits of charm pricing. The practice typically involves dropping the cent so that a price like $3.00 is reduced to $2.99. A strategy tried and true, its power is often attributed to the numbers after the decimal – the “99,” in the figure. It is often thought that people gravitate more to this pricing option because “$2.99,” is technically lower than “$3.00.” This, however, is a misconception. The true power in this marketing strategy lies in the consumer’s perception of its leftmost digit.
See, a one cent reduction in price is negligible if the left-most digit does not change. For example, a one cent discount say from $5.99 to $5.98, will do little to boost sales. Charm pricing works the way it does because of the way we read and interpret information. We, in the Western world, read from left to right. As a result, our brains take in the leftmost digit first. We understand that $2.99 is basically $3, but in the part of our minds typically only revealed to our therapists, they become completely different entities. Our brain registers that two as being a whole digit less than three, when it is only 0.01 digits removed.
Charm pricing has stuck around for a reason. Keep it in mind when labeling those price tags.
Price Tag Sizing: The Visual, The Auditory
Another thing that influences a customer’s perception of a price tag is the size of the numbers on it. No, not the dollar amount but the visual and syllabic size of the numbers. Basically, it’s how you’ve chosen to write or print them.
The brain has an odd way of conflating the literal, observable magnitude of things with their symbolic magnitude. When a price is written in large bold text, we subconsciously encode it as number of greater magnitude, making it feel more expensive in our minds. Consider using smaller handwriting or font sizes when marking your prices. It is this same principle that drives many a savvy salesperson to render their prices as $1799, rather than the comma-inclusive alternative of $1,799.
For discounts, you’ll want to employ the opposite strategy. Render your prices in big, bold letters. Use that comma. The magnitude of the discount becomes, in the subconscious mind, conflated with the size and or length of the numbers presented. Essentially, the discount will feel like a bigger deal.
The other way that price sizing influences customer perception refers to the actual syllabic length of the written prices. Prices with more syllables are encoded by the brain as having greater magnitude. The brain then — well, you get the idea.
This isn’t relegated just to prices spoken aloud either. Subvocalizing, speaking in your head, is a feature most of us can’t turn off – except sometimes through substantial meditation (which, on a side-note, is highly recommended).
Thus, the auditory power of a written price, even when spoken internally, can influence customer buying decisions. If you’d like to maximize sales, consider rendering the prices of your more expensive items in a smaller form. Use small text, remove that comma. Instead of using a lengthy multisyllabic number, opt for a neater one. The number 1,499 is interpreted as 10 syllables when read. One-thousand four hundred and ninety-nine. The number 1499, or fourteen-ninety-nine, is the same figure sans the comma. It is a mere five syllables.
For discounts you’ll want to discount this advice, and again, do the opposite.
Positioning The Price Label
In this final section, we’ll take a look at how the placement of numbers on a price tag influences buyer’s perception of cost. Most of us learned how to count using two primary tools, a numberline and our fingers. In the Western world, we have a tendency to start counting on the left, and then move toward the right. It mirrors the way we read. It becomes easy, then, to associate numbers positioned to the left as being smaller than those situated to the right.
The brain has a way of connecting a thing’s spatial positioning with its symbolic worth. Heaven is “up above,” stocks “rise,” people get “high” and we often describe feelings of euphoria with “floating” metaphors. “Down,” on the other hand is associated with things of a context opposite those of “up.” Feeling “down,” stocks “plummeting” and we all know that “hell” is often referred to as the world under ours. The same metaphoric mechanism occurs in the mind when numbers are concerned.
If you’re seeking to boost sales, consider positioning those heftier numbers to the left of the price tag label. It will be encoded as an entity of smaller magnitude i.e. cheaper. For a real world example of this practice, click here.
A good salesperson, brand owner, retail manager or marketing director will be well versed in the minute economic principles that can influence the success of their business. A great business person will make it a point to better understand the psychological trends from which those economic truths come. We hope this helps! Thanks for reading.
Oh and you can shop our selection of price tag labels to experiment with the sweet psychology concepts you just learned.