When presenting quotes to customers, have you ever considered how the psychology behind your pricing could be influencing whether you close a sale? Marketing consultant Hayley Simmons investigates
The way you present your prices can significantly influence whether a customer views their investment as a wise choice or a daunting expense.
As consumers, we need context to evaluate ‘value for money’. Big purchase decisions aren’t made entirely rationally; instead, we rely on emotions and mental shortcuts.
Price anchoring is a technique that occurs when customers are exposed to an initial price that sets a reference point (or anchor), influencing their perception of subsequent prices. For example, if a high-priced option is presented first, other prices may seem more reasonable by comparison.
The application of this is well suited to kitchens. You could try this by recreating the same design as closely as possible but with 3 tiers of specification, broken down by door choice, cabinetry, appliances and worktops. The middle option, framed by an entry level and more luxurious option, will often appear to be the most balanced and reasonable choice.
By presenting options this way, you make it easier for the customer to make decisions. We naturally expect higher-quality products to cost more, and by transparently showing the quality trade-offs against price, you build trust and confidence in how the budget is being allocated.
Also, most of us know that prices ending in 9 (e.g. £9,999 instead of £10,000) are perceived as being significantly lower, even though the difference is minimal, but did you know that the visual length of the total price can also have the ability to impact our perception?
£15,878.99 would be perceived higher than £15879. By removing the pence and commas, the price appears smaller, which research shows is subconsciously associated with being lower.
Deducing a discount
Most retailers I work with do apply some level of discount to a quote, sometimes applied somewhat arbitrarily to hit a certain total price. However, there are ways to make the same discount feel more valuable without changing the actual numbers.
One way is by displaying the discounted price alongside the original price, with the original crossed out. This makes the discount more impactful than simply showing a lower net price.
Additionally, instead of applying a discount across the total price, consider weighting it on specific products. This can be particularly effective if there’s an item the customer is especially price-sensitive about.
For example, if the customer has chosen a more expensive paint-to-order colour or a bespoke cabinet solution, you could clearly present this as a complimentary upgrade.
Appliances are already lower-margin items before being discounted, but they do have clear and comparable value in the marketplace. Offering a ‘bundle’ discount or a free upgrade to a more premium brand may be perceived more favourably than a flat percentage, or just deducting the same value from the cabinetry, which is difficult to compare.
These are tactics commonly used by car dealerships for good reason – such discounts feel more tangible, legitimate and valuable on a big-ticket purchase.
While some of these principles may seem like simple common sense, in a market where pricing is a major pain point for customers, it’s important for retailers to go beyond just the numbers and focus on how to clearly demonstrate value and instil confidence.
If we were purely rational beings, only the actual price would determine whether a customer buys. However, the reality is that we’re emotional creatures making emotionally-led decisions – especially when it comes to something as personal and expensive as a new kitchen
or bathroom!