Catalog and Direct Selling: Don’t Leave Money on the Table
Work With Key Price Points
Always elect to use a consistent .95 (or .99) over a lower amount (.70, .50, etc) at the end of your price points. The customer typically does not recognize the difference, and the additional 45 cents to every sale really can add up. One rule of thumb: .99 says low price and .95 says “value.”
One cataloger calculated the additional dollars it might earn if all price points ended with a consistent .99. It learned that almost $40,000 could be added to gross sales! The other benefit of this technique is a reduction in data entry errors, since it provides consistency for your call center.
Another price point technique is the rule of known “price thresholds.” Price thresholds are numbers such as $14.95, $19.95, $24.95—the price just below units of five or 10. Typically a $19.95 price will sell better than $21.95, or a $49.95 will sell better than a $52.95. Conversely, if you are selling a product for $28.95 you most likely could sell it for $29.95. Even if the product currently sells for $46.95, using the right creative presentation and benefit copy, you could sell it for $49.95.
Most merchandisers understand key price points in which they can effectively sell specific products. But have you tried to move customers up to a similar product with a slightly higher price point? Again, this involves a creative technique that puts the higher price points in a hero position and uses upselling techniques that really sell the additional value received. For example, if a popular price point for a gift basket is $34, show a similar gift basket for $39 (with more in it), but give it more space, a headline that screams “more value” and photograph the basket showing the extra “abundance.” The additional $5 is not that much, and if customers decide against the upsell you still offer the comfortable $34 price point.