Price pain: 5 lessons learned from a sushi bar
Every time we make a purchase, we experience a sense of pain. Two scientists by the names of Prelec & Loewenstein (1998) referred to this price pain as the “pain of paying”. Businesses should do what they can to keep this pain of paying at bay as much as possible. By selling products in such a way the consumer can see the price increase with every purchase is the worst possible thing you can do because it causes the most pain of paying. Don’t think of it as physical pain, but as the activation of brain areas associated with physical pain resulting in a negative experience.Every time we make a purchase, we experience a sense of pain. Click To Tweet
Have you ever found yourself deliberately ignoring the ever-running meter in a taxi? In regular taxis, the negative experience of payment is very high. You can see the price on the meter go up with every turn you take. So you know how much every minute is costing you, and every added euro brings an increasingly painful sensation. Please look away.
Uber revolutionised the payment system for taxis by eliminating the awful visual meter. No physical payments needed because you pay with your credit card and you know the price beforehand. Everything happens automatically. Which results in a decreased pain of paying. Choosing to utilise credit card processing is one of the tactics that help reduce the pain of paying. Paying with a card makes you feel like you’re not spending money when you purchase something. The message to those concerned is obvious: try to avoid multiple individual “pain-moments” in the buying process.
So why would anybody choose to use one price for one single item on sale? Supermarkets have no choice of course. We don’t blame them. However, restaurants do have that choice. They can set prices for menus and combine dishes and courses into one single price and thus reduce price pain. So why do so many sushi restaurants sell their sushi pieced together in small portions? A visit to a fantastic local sushi shop was the inspiration for this article. It will focus on how you can take the price pain out of sushi.
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Taking the pain out of sushi
The problem with sushi, assuming you like sushi in the first place, is that it hurts your brain to buy it.
Our brains don’t like pain. It tries to avoid it at all costs. Our minds are lazy. They love fluency and ease. Simple, and fast. It loathes losses.
According to our brain, it is better not to lose €10, than it is to find €10. We call this phenomenon “loss aversion”. Another aspect at play is processing fluency. Processing fluency means the faster and more easily our brain can process information, the more positively we evaluate this information.
With the help of these and other psychological principles, the following set of tips will reduce the pain of pricing.
Reducing price pain
Brains are even willing to pay more, to avoid price pain. The pain of paying is very easily triggered. Just seeing the euro sign can remind the brain of the pain, and cause people to spend less. So first of all, think about ways to get rid of your pricing symbols! A price of 99 is perceived as cheaper than €79.Brains are willing to pay more, to avoid price pain. Click To Tweet
Then, think about getting rid of your pricing and numbers altogether. Some restaurant use colours in their menus corresponding to prices. This way your brain won’t be triggered to experience the pain of pricing. Other restaurants use coloured plates to apply the same principle and stop customers from continually being confronted with the prices. All you need to do here is collect the small plates you picked and pay everything afterwards. Tapas bars in Spain use different coloured toothpicks to do the same. You can get creative with these colouring methods!
Another way to try to eliminate price pain is by implementing an all-you-can-eat system. No more individual price points issues, and this also shows customers that the pain of paying is over. However, if you are still thinking about using prices, setting the right amount can be done by taking considering the following methods.
By reducing the left digit by one (called Charm pricing) prices that end in 9 or 9,9 increase sales. It is more effective to change the price from €5 to €4.99 than to adjust the amount from €5.20 to €5.19. How come? Our brain encodes numbers so fast that the decision process starts as soon as our eyes encounter the first digit of the price. Since “4” is less than “5”, this method makes the entire cost seem less expensive, while the difference is only 1 cent.
Positioning the price
Placing the price on the left side of the page will make it seem smaller in magnitude. Does this sound too simple? Think about it. We are used to seeing low numbers on the left side. Imagine a ruler on your screen, low numbers are on the left, right? By placing the numbers on the left, you will automatically trigger a mental conceptualisation of smaller prices in the brain.
Set an anchor
List your most expensive item at the top of the menu. That way all the prices below the first one will seem cheaper. Because people hold the tendency to rely too heavily – or “anchor” – on one trait or piece of information when making decisions. The following lower priced items will appear to be of better value. You could even try to put bluefish tuna on top (still holds the record for the most expensive seafood of all time) to set an extreme anchor and see what happens 🙂Set an anchor by showing your most expensive items first Click To Tweet
Back to school
Another unusual tactic has to do with everyone’s favourite: arithmetics. Remember when you had to practice the multiplication tables over and over when you were a kid? Most of us have potent recollections of memorising these sequences and know them by heart. After reading 6 × 3, you can probably hear the answer automatically, and effortlessly in your head. It’s that well encoded into your long-term memory.
Because of these strong connections, exposure to two numbers (6 and 3) increases processing fluency for the product (18). When a menu or a poster in a sushi restaurant offers 6 × 3 sushi, our brain will process the price of €18 more easily. Moreover, remember the easier our brain processes information, the more positively we evaluate the cost!
There are many scientifically proven methods for you to apply to help relieve your customer’s brains of the pain of paying. Many more other than the ones discussed here (like emotional marketing). The methods listed in this article will prove highly successful for the sushi market due to its typical way of selling items piece by piece. Help your customer’s brains avoid pain by redirecting the focus from paying, to solely the experience of enjoying sushi.
- The sources and Consequences of the Fluent Processing of numbers – Dan King & Chris Janiszewski (2011).
- The Red and the Black: Mental Accounting of Savings and Debt – Drazen Prelec & George Loewenstein (1998).
- Penny Wise and Pound Foolish: The Left-Digit Effect in Price Cognition – Thomas & Morwiz (2005).
- $ or Dollars: Effects of Menu-price Formats on Restaurant Checks – Yang, Kimes, & Sessarego (2009).