Pain triggers harming your business?
I recently came across an interesting study conducted by Cornell University that piqued my interest. It was titled "$ or Dollars: Effects of Menu-price Formats on Restaurant Checks". They wanted to know if the menu price format would affect customer's spending behavior. They conducted their study during lunchtime at St. Andrew's, the restaurant at the Culinary Institute of America, in Hyde Park, NY.
They handed out identical menus with 3 different pricing formats:
- Numerals with a dollar sign ($20.00)
- Written out (twenty dollars)
- Numerals without a dollar sign (20.)
Do you think these slight changes will have an effect on how much customers end up spending? Well, they did. Let's take a look at the results.
Even though all three pricing formats had the same dollar value, customers spent less when presented with a menu that showed prices in formats 1 ($20.00) and 2 (twenty dollars), and spent more when presented with a menu that showed prices in format 3 (20.). So why is this?
It seems that the $ symbol and word "dollars" holds some weight and may trigger the brain to focus on the value of the item vs. the price. Instead of considering what to eat and focusing on the pleasurable aspect of having lunch, they are "consumed" (excuse the pun) by the pain of spending and end up spending less. The mere mention of "$' or "dollars" reminds customers of the expense and makes them more spend cautious.
On the other hand, the absence of the "$" seems to allow customers to be less "pained" by cost which allows them to focus on their consumption choices.
This leads me to ponder... what other subliminal triggers hinder businesses? Might be worth examining your website, social media pages, advertising, etc., to see if there are any silent pain triggers that prevent you from getting the most from your paying customers.