by admin |

• Content marketing
• E-commerce

September 18, 2015

4 reasons why price format affects customer purchase decisions

The state of mind & soul every customer reaches before clicking on the “Buy” button is called The Grand Pain for Paying. According to the level of this pain, there are two main types of customers:

Tightwads – they intend to spend less than they would ideally like to spend

Spendthrifts – they experience too little pain in paying and usually spend more than they would ideally like to spend.

In both cases, customers feel the pain before and after purchasing. But what’s most important is that they spend either way! The consequences of spending too much or, ideally, less are happening afterwards. Considering that purchase decisions can increase if prices are made in the correct format. On the other hand, these visual tricks will decrease the pain of paying and only foster purchase decisions.

Price is one of the primary visual and cognitive motifs before purchasing. E-commerce experts are there to release the pain by designing price formats that look different but sell for the same amount. There are 4 most common (primarily visual) price formats seen at most online stores that you should take into consideration:

 1. Format a good round or decimal amount

What’s the difference between a round and a decimal price? From a consumer’s point of view, the first impression when they see the price format is regarded as purely psychological. At the same time, this first impression usually determines the final purchase decision. For a shop owner, the price format is cleverly calculated to bring more revenue. If the price format (a round or a decimal amount) is eye-catching for a consumer, then both sides (the consumer & the shop owner) will find it satisfactory.

 

Decimal prices create the feeling that the price is lower. It is, but the difference between the nearest round price and the one “broken by decimals” is not worth mentioning. However, decimal prices usually include the number 9 at the end (for example, 5,99), which is considered a magical number in the e-commerce world.

On the other hand, round prices are a sign of accuracy and are easily calculated. For example, suppose consumers tend to purchase more items at once. In that case, the final price will be easily calculated in their minds if separate prices are displayed in round and not decimal formats.

 

Regarding this comparison, we found an interesting example of prices displayed in round and decimal formats. In both cases, there is no currency anywhere. This may be because the shop sells its products to the Dutch market, where the Euro is a default currency. However, if you sell in more than one currency, showing them beside each price value is recommended.

Screenshot taken from: www.hema.nl

2. Change price colour

Colours are connected to visual memory, about 80% of the entire remembering process. On the other hand, colours are real decision-makers when purchasing. Consumers are likelier to choose a product by its colour rather than material. So, this is often the first and most important impression in the buying process. E-commerce specialists know this very well when determining the displayed price’s colour.

 

Different colours emphasize which type of goods you will choose. For example, black colour represents a powerful brand and is often connected to luxury brands. On the other hand, we usually see red for products that are being sold. Red is for energy, increasing the urgency of buying before the product is out of stock. Most sale prices are coloured in red. The alert for “Buy me now, I am cheap” creates anxiety that somebody else might get the item because it’s on sale.

Regular prices are usually coloured black, representing the steady value of the item. Depending on the industry, many shop owners colour the prices according to their design. However, most examples show regular price colours in black and sales prices in red.

Screenshot taken from: www.hm.com/nl

3. Increase price font

Besides determining the price value, price format involves another price display method. One of them is the price font. By simply increasing the price font, you can benefit from more purchases. For example, online e-commerce sells computer hardware and software from popular brands. When they increased the font size on their discounted price on the MS Office product page, the conversions increased by 36.54%

People don’t expect to browse for hours to find the necessary information. With a price font that clearly shows the discount or, on the other hand, the product’s value, consumers will quickly decide to buy it even if there is another similar and cheaper product around there. If actions speak louder than words, increasing the price font only means more sales.

4. Combine numbers with words

At the beginning of this text, we connected buying with a psychological perception of spending money. One of the ways to format a price is to enhance it with text. Instead of saying: “10€ each”, try with “Only 10€ for each”. This will create a price context, which is essential in forming an opinion about the product’s price.

 

On the other hand, adding content can result in purchasing a product at a higher price. For example:

 

“A pair of trousers for 59€”

“Best-quality trousers for 89€”

“Trousers and a blouse for 89€”

 

How many people will purchase the second option? Well, maybe some. According to research, people tend to buy cheaper things (better known as “bargain hunters”). But, if they see a higher price, they might think of the quality instead of only the price (better known as “value seekers”). In that case, a higher price can be the right solution for some, while two products for the same price remain the best.

 

 

In Magento 2 world, all these options can be implemented. Some of them are part of the development process; the others are a matter of design. However, using and testing these methods can only lead to more sales and e-commerce revenue. Price format is the essential part of the process since “adding to the cart” means paying—the grand pain of spending can be significantly reduced with the four most common and proven methods.

 

Whether you’re a Magento merchant or a merchant on some other platform, your goal is to have a webshop that converts your visitors into customers; for that, you need an experienced development agency. Feel free to contact us if you need help in your Magento store or if you would like to transition to the mighty Magento platform and achieve e-commerce success!