There is an incredible wealth of information available to marketers these days that it can be equally overwhelming to know how to take it all in. But sometimes it helps to take a step back and reflect on some of the marketing basics and think about the psychology of what makes people buy in the first place. So, I've collated 29 of the most common psychological tricks used by marketers to encourage people to buy more.
1. Remove the comma
Research shows that removing commas makes a price seem lower.
$1,899 vs. $1899
2. Choose numbers with fewer syllables
Even though people don't usually say prices out loud, studies show that people perceive phonetically shorter prices as being cheaper.
$27.82 = twenty-seven-eighty-two = 7 syllables
$28.15 = twenty-eight-fifteen = 5 syllables
3. Reduce the left digit by 1
Our brain encodes numbers so quickly that a smaller first digit is enough to make the price seem much smaller - although I wonder how this compares with choosing numbers with fewer syllables.
$2.99 feels like a lot less than $3.
4. Show price in installments rather than a lump sum
Consumers tend to get anchored on a smaller price subconsciously, even if they know the total price.
If a new TV costs $2987, present the price as 12 low-payments of just $249 a month.
5. The Gruen Transfer
Shop layouts are often designed to be confusing and maze-like, forcing people to wander and see more merchandise than they initially planned. This trick is names after mall architect Victor Gruen, who actually hated such manipulative techniques. If you have ever visited an IKEA store, you'll have experienced the Gruen Transfer in it's essence.
Side fact: the Gruen Transfer is also the name of an excellent ABC television show from Australia.
6. Visual contract between sale prices
Visual distinction between the sale price and original price is powerful. If the original (higher price) is bold, big, and a different colour, that will make the sale price seem more appealing.
7. Maximise the perceived size of the discount
Retailers use the biggest number possible to label discounts.
20% off a $50 kettle seems better than $10 off, even though they're both the same amount.
8. The nostalgia factor
Research shows that nostalgia makes people value money less and feel willing to pay more. It especially seems to emotionally appeal to stressed and overwhelmed millennials, who may crave simpler times.
9. Make products seem expensive to manufacture
Consumers want to pay what they believe is fair, so statements like "our coffee is 100% organic" are more effective than "our coffee is delicious". Mentioning top-of-the-line raw materials makes people feel better about spending more money.
10. Calm, slow music
Quiet, calm, and slow music encourages shoppers to spend more time in the store. Alternatively, faster music speeds up the heart-rate, moving people out of restaurants faster.
11. Offer exclusivity
Near the top of Maslow's Hierarchy of Needs is esteem. Slogans like "The Few. The Proud." by the U.S. Marines and "Membership has its privileges." by American Express play into this need.
12. Social proof
People are more willing to do something if other people are doing it. Using reviews and testimonials as part of advertising earns trust. However, reviews are not always what they seem.
13. Expose consumers to higher prices, even if they are unrelated
In a 2004 experiment, music CDs were sold on a boardwalk. Every 30 minutes, the adjacent vendor changed the price of a sweatshirt on display to either $10 or $80. People spent more on CDs when the sweatshirt was $80! Whaaa, that's crazy!!!
14. Include an expensive menu item most people won't buy
By having a $50 dish on the menu, diners are more likely to shell out $30 for other menu items because the cost seems reasonable in comparison. This is called "arbitrary coherence."
The concept of arbitrary coherence is the following:
Despite the fact that the initial prices are arbitrary (e.g. the most expensive menu item), they have a tremendous effect on our judgments. Once they become fixed in our minds, they not only affect our present economic decisions, but also shape the way we make future ones. This makes it coherent.
15. Staples in the back
Supermarkets put necessities such as milk and eggs in the back of the store so you must pass everything else to reach them.
16. The instant markdown
Retailers instantly mark down a price as low as it can go while still making a profit. The sign might say, "Retail price $139.99: Our price $49.99." This tactic is illegal in some countries, such as in Denmark, where you can't advertise a "before" price if it hasn't been sold for that much in the past two weeks.
17. Red prices for men
Studies have shown that men are more likely to buy product when the prices are displayed in red. Men seem to process ads more quickly and use colour as a visual heuristic, and "red" equals "discount".
18. Ditch the dollar sign
Research shows that menu items that include prices without dollar signs get diners to spend more than menus with dollar signs.
Garlic bread 5 vs. Garlic bread $5
19. False sense of urgency
Regardless of these statements being true or not, they create a sense of urgency that overrides careful purchase planning.
20. Small daily equivalence
Breaking the price down into how much it costs daily (or comparing it to a cup of coffee) makes the price seem more affordable.
Charities use this method often, by saying things like "For less than a cup of coffee a day, you could help this child have a better future!".
21. Touch and mimicry
Research shows that a woman's touch (like a brief touch on the shoulder) makes customers of either gender feel more secure in spending money. Additionally, if a salesperson of either gender imitates your gestures, you may be more likely to buy.
22. Use words related to a small amount
Descriptions like "low maintenance" are more appealing to consumers than "high performance" even though both qualities are valued.
23. Odd-even pricing
Consumers are more likely to choose something at a price ending in an odd number that is right under an even whole number, like $4.97.
24. Phase out discounts
When people miss a great sale, they may be disappointed. However, if it is still on sale but less discounted, people may jump on it in feat that they will miss their chance again.
25. Decoy pricing
Imagine that a small popcorn is $4, a medium is $8, and a large is $8.50. Many people will go for the large since it is "only 50 cents more" than the medium. The medium only exists to boost sales of the large.
26. Buy one, get one free
Buy one, get one (BOGO) compels people to buy something at full price and often spend more than intended. Prices are set high enough to cover the "free" item. These have all but replaced 50%-off sales, even though half-off deals benefit consumers more. BOGO offers are popular among consumable and perishable goods, such as flavoured milks or soft drinks sold at Petrol/Gas Stations.
27. A bright, colourful entrance
Stores often fill their entrances with colourful merchandise (such as fresh produce) to brighten moods and encourage more spending.
28. Remove the pain of paying
Uber revolutionised the taxi industry by having customers pay transparently before service is received. This is way less painful than watching a meter rise as you ride and THEN paying.
29. Focus on time rather than money
People are emotional and want to enjoy life, so "you'll love using our product" works better than "our product is inexpensive."