07 May 2015

The psychology of pricing: Terms and questions

Here's how The Browser summarises The Psychology Of Pricing: A Gigantic List Of Strategies:
... a long read, almost an e-book, but clearly written and easily read, which explains plausibly why things are priced for sale the way that they are, right down to the omission of dollar signs from restaurant menus. And all the 0.99 price tags, the “charm pricing”? It’s about getting the first digit down, the anchor number. Even when we think we know the trick, we are easily manipulated (7,500 words)
If you're translating into English, this document could be a useful source of terminology and understanding. But, if your read it as a translator or linguist familiar with French, or just about any other language for that matter, then you will be struck by the translation challenges posed by statements like these, or more generally by their limited cross-cultural validity:

Charm pricing is most effective when the left digit changes. A one-cent difference between $3.80 and $3.79 won’t matter. However, a one-cent difference between $3.00 and $2.99 will make a huge difference.
Why is the left digit so important? It involves the way our brain encodes numerical values.
Our brains encode numbers so quickly (and beyond consciousness) that we encode the size of a number before we finish reading it.

Tactic 3: Choose Numbers With Fewer Syllables
Our brain uses more resources to process phonetically longer prices (which triggers a fluency effect). Since we use a larger amount of mental resources, we falsely infer that those prices must be larger.
The flipside is more important. People will perceive your price to be lower if it contains fewer syllables.
But Nick! When I see a price, I don’t say it out loud. I just read it.
Same here. But according to research…that doesn’t matter. When you read a price in written form, your brain nonconsciously encodes the auditory version of that price (Dehaene, 1992). You don’t even need to verbalize the price in your mind — your brain encodes it either way.

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