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billets ventes prix psychologiques

How to increase prices without decreasing sales: 1) Psychological prices

 

billets ventes prix psychologiques

Setting high prices without impeding sales is the neuromarketing aim of all retailers. Here I describe a simple technique to reach that goal via the use of “psychological” prices.

 

 

 

The linear relationship between sales volume and price is a basic selling principle. If customers act rationally, sales volume is expected to decrease as prices increase. Conversely, sales volume should increase when prices decrease. This idea is correct in theory. Indeed, this relationship is commonly found; especially as far as Fast-Moving Consumer Goods (FMCG) are concerned. This is because their prices usually show little elasticity. That does not mean that the above-mentioned negative relationship is true in every context. There are situations where price drops do not cause an increase in sales volume. And others where a price increase does not genuinely lead to sales’ decrease. We could just as well conclude that businesses and retailers suffer from missed opportunities to raise their profits!

 

 

psychological prices

 

 

PSYCHOLOGICAL PRICES

 

Psychological prices are certainly the most popular and used neuromarketing technique. Scientific studies show that consumers’ brains tend to focus on the first digits of prices. For instance, a product priced at £7.99 will appear as less expensive as the same product priced at £8.00; despite the 1 pence difference being minimal. This is because our brain tends to focus on the “7” digit for the first price, and on the “8” digit for the second one.

Offering a product priced at £7.99 instead of £8.00 can potentially help you enjoy a higher sales volume. This will also substantially compensate for the 1-pence loss per product. Indeed, your customers will perceive the £7.99 product as less expensive, and thus more affordable.

Following this rationale, a product priced at £7.00 will be perceived as roughly as expensive as a £7.99 product. In both cases, the price’s first digit is the same (“7”). Pricing your product at £7.00 in this situation should not lead you to enjoy as many sales as you could expect. The price decrease from £7.99 to £7.00 will be perceived by your customers’ brain as less important than it really is. Consequently, you may rather suffer from a profit loss of 99 cents per product (12%). This loss may, eventually, be hard to compensate for with an increase of sales; hence, a missed opportunity to raise your profits.

 

 

Consumers' brains tend to focus on the first digits of prices Click To Tweet

 

 

A DOUBLE-EDGED SWORD

 

psychological prices sales

Please note, however, that psychological prices are a double-edged sword. Prices ending in 9 unconsciously refer to low-quality products. I would, thus, advise against using 9 as an ending for good-quality products. For instance, a high-end restaurant should use round numbers, such as £18, without decimals or options ending with 9. Conversely, a fast-food or casual restaurant would be advised to set its prices according to the psychological prices’ principle (£11.95 for a vegetarian pizza).

 

 

 

Prices ending in 9 unconsciously refer to low-quality products Click To Tweet

 

In a future blog article, I will emphasise the importance of customers’ psychology and the framing of prices for their potential to increase prices and profits.

 

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ABOUT THE AUTHOR:

Dr Morgan DAVID   

A former academic and behavioural sciences expert, Dr Morgan David is the founder and director of ANALYTICA, a consultancy agency based in the UK and in France. ANALYTICA uses the way our brain works to design better products and better services in the realm of neuromarketing, webmarketing, customer experience, sales strategy and pricing tactics. ANALYTICA created CogniSales, a neuromarketing sales service, and CogniMenu, the first new-generation menu engineering service.

 

 

packaging

How to use neuromarketing & customer psychology for product design & packages?

 

packagesProduct designs & packages are often conceived by creative professionals. Whether they are designers, advertisers or communication experts, these specialists are gifted enough to invent elaborate and original creations. However, aesthetic creations do not automatically translate into something meaningful for customers’ perceptions, decisions and behaviour. Then why and how can we create products and packages that trigger a positive impact on customers’ perceptions and purchase intentions?

 

 

CREATING EFFICIENT PRODUCTS & PACKAGES

 

Offering products and packages in line with people’s needs and expectations is crucial for successful customer-experience and sales.

Neuromarketing and customer psychology help to predict which features of a product or a package will have an impact on people Click To Tweet

 

Neuromarketing and customer psychology help to predict which features of a product or a package will have an impact on people. For instance by determining how their perceptions are going to influence purchase decisions.

 

 

SOME APPLICATIONS

 

Take the example of Champagne bottle labels. It has been proven that labels with complex aesthetics are perceived as more feminine and sophisticated. Conversely, labels with a simpler design are perceived as more modern, successful and authentic.

 

 

packages

 

 

Another study focused on different products like laptops, suitcases, cars and pens. It has been shown that when these products wore dark colours, they were perceived as heavier, more durable, but also less user-friendly than the same products with lighter colours (see examples below).

 

 

packages

 

 

Campbell’s soups relied on neuromarketing the last time they revisited their packages.

 

 

packages

 

 

A final recent study has shown that “cute”, personified food displays, and realistic, neutral ones had a varying impact on purchase intentions depending on the type of food being sold.

 

 

packages

Vice product” corresponds to cookies, and “Virtue product” corresponds to fruit juice

 

 

ON THE INFORMED USE OF NEUROMARKETING & PSYCHOLOGY

 

We do not advocate that businesses should focus on the “superficial” features of their products. If your product is genuinely bad, customer-experience will inevitably be bad and prospects for repeat business should be reduced to null. Neuromarketing and customer psychology are not to help sell products that are insufficiently attractive, or to help make a product better than it actually is.

 

Neuromarketing and customer psychology are not to help sell products that are insufficiently attractive, or to help make a product better than it actually is Click To Tweet

 

That said, it is essential to take into account how people’s brains work and run empirical, scientific and objective trials. Without these, interpretations about how customers will perceive and react to your product is nothing but pure speculation. Studies of psychology applied to design and packaging, like the ones shown in this post, are manifold. To beat luck and predict which features will positively impact sales, neuromarketing and customer psychology are undoubtedly the most efficient tools currently available.

 

 

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ABOUT THE AUTHOR:

Dr Morgan DAVID   

A former academic and behavioural sciences expert, Dr Morgan David is the founder and director of ANALYTICA, a consultancy agency based in the UK and in France. ANALYTICA uses the way our brain works to design better products and better services in the realm of neuromarketing, webmarketing, customer experience, sales strategy and pricing tactics. ANALYTICA created CogniSales, a neuromarketing sales service, and CogniMenu, the first new-generation menu engineering service.

 

 

cerveau marketing psychologie

Why psychology is essential to your marketing strategy

cerveau marketing psychologie

For some companies and some marketers, psychology is nothing but abstract science. Yet for the most informed ones, it is an innovative opportunity to understand and reach their target in an efficient way.

THE ISSUE

The challenge faced by marketing and sales campaigns is to accurately assign customers to different profiles. Campaigns thus either reach a single sociodemographic segment that is irrelevant and too extensive (generation X, Y, socioprofessional category, age, interests, and so on). Or they attempt to reach too wide a spectrum of various prospects in a unique and single manner. The latter strategy bears the risk of not reaching anyone by speaking to everyone all at once…

 

PSYCHOLOGY DECONSTRUCTS TRADITIONAL MARKETING SEGMENTS

Customers of a given segment – socioprofessional categories, sociodemography, age, location – can actually show substantial psychological differences. These customers won’t be sensitive to the same sales and marketing messages. Conversely, customers from these different traditional marketing segments may be sensitive to the same marketing content owing to similar psychological profiles.

psychologie marketing segmentation

The benefit of integrating psychology to your sales and marketing strategy is simple. Psychological segmentation criteria allows you to 1) categorize customers in a more accurate and relevant way than traditional marketing segments; and, 2) adjust sales and marketing content to different psychological profiles. Taking psychology into account enables you to establish new marketing segments that turns out to be more accurate, more efficient, and based on science.

WHAT ARE THESE PSYCHOLOGICAL PROFILES?

segmentation psychologie marketing

Your target can be categorized using psychological variables called psychometric scales. For instance, personality can be assessed following 5 scales – aka the Big Five – which are extraversion, neuroticism, agreeableness, openess to experience and conscientiousness. These scientifically-validated scales generate a score for every customer that is assessed. Sales and marketing content can then be tailored to different personalities for greater efficiency.

WHICH CONTENT FOR WHICH PROFILE?

In neuromarketing, the prevention-promotion psychological scale helps us identify different types of customers. On one hand, customers can be more sensitive to prevention-based content, such as the reduction of potential risks or uncertainty (ʺThe braking system of this new car model reduces braking distance and thus diminishes crash risksʺ). On the other hand, customers can be more sensitive to promotion-based content which emphasizes benefits (ʺWith a more efficient engine, this new car model allows you to cover longer distances with a single full tankʺ).

CONCRETE RESULTS

Bringing customer psychology to sales and marketing strategies remains underused. Yet, some pioneering companies have already obtained spectacular results. In a 2017 study, British and American researchers assessed the efficiency of tailoring advertising content to customers’ personality. The personality scales used were extraversion and openess to experience. Scientists recorded the number of mobile app. sales when advertising content was tailored to customers’ personality. These sales were compared to a second campaign where advertisements were the same for every customer. Results show that mobile app. sales increased by 79% when advertising content was tailored to customers’ personality.

psychology marketing strategy sales
Psychology applied to marketing and sales strategy in 3 phases

In a future post, we will discuss how to assess customers’ psychology and how to adjust sales and marketing content accordingly.

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ABOUT THE AUTHOR:

Dr Morgan DAVID   

A former academic and behavioural sciences expert, Dr Morgan David is the founder and director of ANALYTICA, a consultancy agency based in the UK and in France. ANALYTICA uses the way our brain works to design better products and better services in the realm of neuromarketing, webmarketing, customer experience, sales strategy and pricing tactics. ANALYTICA created CogniSales, a neuromarketing sales service, and CogniMenu, the first new-generation menu engineering service.

logo CogniMenu menu engineering

CogniMenu: an innovative service to boost UK restaurants’ sales

Restaurants commonly have two options to increase their benefits: to reduce their costs or to increase the amount of the average order. Building on the latter option, CogniMenu genuinely boosts restaurants’ sales with an innovative, yet simple and efficient solution that uses neuromarketing techniques.

 

 

Proposing good products does not automatically translate into effective sales. This is true in the catering and hospitality sectors as well as in many others. As passionate as the chef can be, and as delighted as clients might feel, managing sales effectively is of utmost importance to a restaurant owner. This requires anticipating and responding appropriately to customers’ expectations and behaviour which is an aspect of the selling process that is all too often missed by restaurant managers. Not much of a surprise, given that restaurant owners cannot simultaneously be chefs, managers, salespeople and marketers…

 

cognimenu

Based on these statements, CogniMenu has been created to help restaurant managers access a hitherto unexplored source of profit: their menu!

 

 

HOW DOES IT WORK?

 

From our experience virtually no menus are optimised in a way to make the best of what restaurants offer. Generating benefits through sorting out these lost sales opportunities is what CogniMenu provides.

 

CogniMenu uses the latest techniques from neuromarketing to anticipate customers’ psychology and behaviour, thus improving their experience as well as increasing restaurants’ profits.

 

CogniMenu brochure first pageThe good news is that these techniques are easily applicable and very efficient: we reinvent the structure, organisation and presentation of menus, the labelling of meals, and optimise prices. For example, carefully laying out meals under several sub-categories can improve orders and sales up to 25%. Also, improved meal labelling can increase sales by 27%!

 

 

 

CogniMenu’s process of sales’ improvement goes through the following three steps:

1) We identify priorities, objectives and opportunities to be explored with the restaurant manager

2) We provide a new optimised version of the restaurant’s menu.

3) You enjoy a rise in both your clients’ average order and your average margins.CogniMenu menu engineering

 

In addition, personal support in the application of an individualised and powerful sales marketing strategy can be offered.

 

See how CogniMenu has been efficient with our latest client:

 

Optimising menus to boost sales is easily applicable and a common technique in some countries, like the US. In the UK though, there is not any innovative service like CogniMenu!

 

To find out more about CogniMenu:

Web page: www.cabinet-analytica.fr/en/cognimenu_uk/

Email address: morgan.david@cabinet-analytica.fr

Twitter: @CogniMenu_UK

Phone: +33 651 402 001

 

neuromarketing marketing morgan david

What is neuromarketing?

Offering great services and great products is rarely enough to generate sales. The reason for this lies in our brain. As functional as it is, our brain does not always act in a rational way!

 

 

 

Our brain uses precise rules when collecting, processing information and eventually taking decisions. Neuromarketing consists of taking into account these decision rules, along with the way our brain works, to optimise customer experience and encourage purchases. Emphasis can thus be put on products and services that provide you with the highest margins and profits.

 

Neuromarketing is not magical! Techniques used are based on rigorous scientific evidence from psychology, and their efficiency has been proven to improve selling strategy. Neuromarketing is a great, reliable and efficient tool to increase sales, margins, and your customers’ satisfaction and loyalty.

 

SOME EXAMPLES

 

  • One of the most famous examples of neuromarketing are prices ending with the number 9. Labelling a product at £49 will appear more cost-effective in customers’ eyes and generate more sales than the same product labelled at £50. This is true, but not in every case. It has been proven that a price ending with zero, such as £50, increases customers’ quality perception of the corresponding product, thereby increasing purchase intent. Context indeed matters: a technique that is efficient to boost sales at a given point of purchase may not be as efficient at another one. It is neuromarketing experts’ work to adjust these techniques in a subtle and individualized way as a function of your needs and of your business’ peculiarities.

 

  • Another application consists of taking into account the way our brain makes choices: we mostly compare different options in a relative way, rarely an absolute way. For instance, a pair of shoes labelled at £40 will be perceived as a more of a deal when compared with another pair labelled at £50, than when compared with a third one at £30, and when on its own. This effect can be used to promote products and favour their purchase.

 

 

Neuromarketing and consumer psychology applied to packaging

 

 

  • Another technique linked to pricing consists of splitting the cost of a service to increase client loyalty. It has for instance been shown that people paying a monthly membership to a gym trained more regularly than people paying membership on an annual basis. Annual memberships decreased loyalty to the gym and to the brand, but also the consumption of side-products, such as food, drinks and sports equipment, sold in the facilities. In this situation, a monthly membership strategy seems like a more beneficial pricing strategy.

 

 

Neuromarketing is an efficient and easily applicable tool to boost sales Click To Tweet

 

 

Again, what is relevant and efficient for one business might not be the same for another one. The act of buying is known as being psychologically ‘painful’ for customers. Reducing the number of buying instances should in some cases be favoured. For instance, insurance companies could provide their clients with offers including several options at a given price rather than enabling them to add costly options separately.

 

To conclude, neuromarketing is an efficient and easily applicable tool to boost sales. Its associated techniques, when applied by experts, will lead to major improvements in customers’ satisfaction and loyalty, and increases in profits and margins.

 

 

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ABOUT THE AUTHOR:

 

Dr. Morgan DAVID   

A former academic and behavioural sciences expert, Dr. Morgan David is the founder and director of ANALYTICA, a consultancy agency based in the UK and in France. ANALYTICA uses the way our brain works to design better products and better services in the realm of neuromarketing, webmarketing, customer experience, sales strategy and pricing tactics. ANALYTICA is the creator of CogniSales and of CogniMenu, the first neuromarketing service of new-generation menu engineering aimed at improving restaurants’ sales.