Bargain hunting can be a rush. So much so that customers often don’t notice whether the final dollar amount actually saves them any money--at least, according to a recent report in The New York Times.
But price psychology isn’t quite so simple, says one expert. The extent to which a customer is wooed by percent off signs and slashed dollar amounts, says Simon-Kutcher's Susan Lee, a partner who heads the company's North America consumer and retail practice, boils down to three things: what type of shopper you're talking about (which defines--and is defined by--perceived value), whether a shopper has been “trained” to seek deals, and what the consumer in question is shopping for.
Lee says shoppers can be categorized by what they value--(a) time, (b) brand experience, and (c) the bargain.
Those who value time and brand experience are the least likely to be drawn in by deals. “If you value your time, you don’t necessarily want to spend it cutting coupons,” she says. And a customer who values brand experience might actually be willing to shell out extra dough for products, so they aren't necessarily looking for a deal.
For die-hard bargain hunters, by contrast, the deals draw them in. “Those who love the deals look at the discount amount they’re getting as the success of whether they’re getting a good bargain,” Lee explains.
But don't be fooled: Whatever a shopper values, Lee says that most American shoppers have been trained by large retailers not only to hunt for deals, but to expect them.
“Day in and day out, across the media and in fliers, retailers have trained consumers that there are great deals at certain special times,” she explains.
Lastly, Lee says that whether customers know what the standard price for an item is also a factor in whether they will go be taken in by a deal. “Our experience is that if it’s a highly frequently purchased and involvement category, consumers actually know the prices pretty well,” she says. “But in categories where consumers don’t buy that often, something purchased every 5-10 years or so, consumers don’t know.”
The point? Once you define your company’s target clientele, you can determine how you want to communicate value to them.