Intriguing stuff reported in the Wall St. Journal – stuff we all know – but do you use it in your own sales strategy? Here’s an excerpt:
How Luxury Brands Alter
Shoppers’ Price Perceptions;
Buying a Keychain Instead
“The question weighed on Barry Schwarz as he scanned the racks at Boyds men’s store in Philadelphia, which were laden with $3,000 Brioni suits. “Their prices were just out of the world,” recalls Mr. Schwarz, a professor of psychology at Swarthmore College….
“Some people cut and run when confronted with prices that seem crazy. But many of us experience a sudden emotional-mathematical transformation. We set a new ceiling for a “reasonable” price. Disinclined to go all the way to buy the trophy, we instead settle for a consolation prize. Mr. Schwarz, a jeans-wearing type, walked out of Boyds with a suit that cost merely $800 — the most he’d ever spent on an item of clothing.
“If you’re in that world long enough, $800 stops even feeling like a lot of money,” Mr. Schwarz says.
“This concept is one of the reasons for the proliferation of $300 designer sunglasses these days. The fact that Ralph Lauren is charging $14,000 or so for an alligator “Ricky” handbag makes it easier for a consumer to justify in her mind paying $300 for a rather simple sweater. Many Chanel sunglass owners are actually would-be owners of Chanel suits. Something similar has happened to many owners of Tiffany keychains, Prada legwarmers, Coach wallets, and Frette tea towels…”
-PDF of entire piece here
Do you know how to use this high-to-low strategy when the prospect asks, “How much is it?” (Either for the product or the business start-up cost). Or…
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