“How much?” I asked.
“Twelve euros,” she responded.
I turned the hat over, inspecting it; trying to decide if I want to spend that much on a cotton hat (I already have half a dozen hats sitting prettily at home).
Then she reminded me of my desire—to not burn my face: “It’s very hot today, and your gorgeous face will thank you for covering it.”
She didn’t try to justify the price. She was confident that I would not go away without a hat on my head in the middle of a hot day. I was 90% sold, but I was still hesitant. I was hoping I’d find a hat that was made in Europe instead of China. She picked up on my hesitation. “What’s holding you back?”
“I was hoping for something made from here” I said.
She turned around, grabbed a bright red hat from the rack and handed it to me. “Thirty euros.”
All of a sudden, the twelve euros hat seemed like a steal.
What happened here?
In the sales and marketing world, there is this thing called “price anchoring” that big and small companies use, and it’s time we get acquainted with it. Studies have shown that if you put higher price items besides a lower price item, people will buy more of the lower price, because they think they are getting a great deal.
Case in point: I was speaking to my husband about this topic and he said, “Geez, that sounds like what Joe (not his real name) and his company does. When his salespeople go out to do kitchen renovation estimates, they intentionally overpriced the job at $30,000. When the customer says, ‘You are too expensive’, they then lower their price at $20,000 and at that point, the prospect thinks they just scored a great deal.”
I don’t suggest you go this way as I think this is pure sleazy, but you can get creative with your pricing. If you pay attention and look around, you will see many examples of this.