by admin | September 18, 2015
4 reasons why price format affects customer purchase decisions
The state of mind & soul every customer reaches before clicking on “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 of paying and usually spend more than they would ideally like to spend.
In both cases, customers feel the pain both before and after making a purchase. But, what’s the most important: they spend either ways! The consequences of spending too much or, ideally, less, are happening afterwards. Having that in mind, purchase decisions can increase if prices are made in correct format. On the other hand, these visual tricks will decrease the pain for paying and will only foster purchase decisions.
Price is one of the main visual and cognitive motifs prior to making a purchase. Ecommerce experts are there to release the pain by designing price formats that look different, but, actually, sell for the same amount. There are 4 most common (mostly 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 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 in order to bring more revenue. If the price format (either a round or a decimal amount) is eye-catchy for a consumer, then both sides (consumer & the shop owner) will find it satisfactory.
Decimal prices create the feeling that the price is lower. In fact it is, but the difference between the nearest round price and the one “broken by decimals” is not even worth mentioning. However, decimal prices usually include number 9 at the end (for example: 5,99), which is considered to be a magical number in the e-commerce world.
On the other hand, round prices are sign of accuracy and are easily calculated. For example, if a consumers tend to purchase more items at once, 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 where prices are displayed in both round and decimal formats. In both cases, there is no currency anywhere. This is maybe because the shop sells its products to Dutch market, where Euro is a default currency. However, if you sell in more than one currency, it’s recommended to show them besides each price value.
Screenshot taken from: www.hema.nl
2. Change price colour
Colours are connected to visual memory, which is about 80% of entire remembering process. On the other hand, colours are real decision-makers when it comes to purchase. Consumers are more likely 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 they determine the colour of displayed price.
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 often see red colour for products on sale. Red is for energy and it increases the urgency of buying before the product is out of stock. Most prices on sale 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 choose to colour the prices according to their shop’s design. However, most examples show regular price colours in black and sales price colours in red.
Screenshot taken from: www.hm.com/nl
3. Increase price font
Price format, besides determining the price value, involves another methods of price display. One of them is 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 in order to find the information they need. With price font that clearly shows the discount or, on the other hand, the value of the product, consumers will easily decide to buy it even if there is another similar and cheaper product around there. If actions speak louder than words, then 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 make a price context, a very important thing in forming an opinion about the product’s price.
On the other hand, adding content can result in purchasing a product with 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 researches, 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 only the price (better known as “value seekers”). In that case, a higher price can be a right solution for some, while 2 products for the same price still remains as the best solution.
In Magento, all these options are possible to implement. Some of them are part of the development process; the other ones are matter of design. However, using and testing these methods can only lead to more sales and e-commerce revenue. Price format is the most important part of the process, since “adding to cart” means paying after all. With 4 most common methods to create price formats, the grand pain for paying can be significantly reduced.
To compare how prices might look on different online stores, take a look at our portfolio.