It’s a trick that we’ve all seen dozens of times. “It’s a bargain for only $19.95!” “The beef Burgundy is $20.” One pitch indicates value and the other indicates quality – and the number might be the biggest indicator of all.
Imagine a restaurant menu. If you see prices like $7.99 and $9.99, you get the impression that the restaurant is actually a good value, a place where you won’t be ripped off on the bill. If you see prices like $10 and $12, you get the impression that the restaurant is putting out a value product and that you’ll be getting something of quality.
When a customer comes in the door of your business, are they expecting quality or are they expecting value? It’s easy for a business owner to say “Both” and not really deal with the question, but knowing the answer to that question can make all the difference.
Instead, think of it this way: do you want to be known for providing good quality for the price, or would you prefer to be known as providing the best quality service in town, bar none?
If you want to present yourself as providing “bang for the buck” value, list your prices as being $29.99 or $39.99 or $9.99. If you want to present yourself as having high quality, list your prices as being $30 or $40 or $10.
This becomes a cue in all aspects of your business. The prices come with expectations. If a customer perceives that a place is providing value, they’re more likely to overlook minor details such as cleanliness of the store and presentation of the employees. If you’re using lots of zeroes in your prices, the customer will expect quality in other aspects as well.
Of course, if you go for quality, you can often make those round numbers a bit higher and get away with it – but your customers will be expecting quality in every aspect of your business. You’ll need employees with better customer skills and need to put extra effort into cleanliness and presentation. If you go the other route, you’ll be able to cut some corners, but your revenue won’t be as high. You can get away with the “dusty old shop” routine and an inexperienced person behind the counter, but your revenue won’t be as high, either.
Minding your nines and zeros is surprisingly essential to the nature of your business. Choose them carefully, and remember what they mean.
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