The Write Stuff – Blog

Apr 18 2011 Why Higher Price Tags Are Sometimes Better
Transparent pricing

Prior to building our new home in 2009, many an hour was spent traipsing through glamorous display homes ? oohing & ahhing over lighting fixtures and cupboard handles, imagining the memorable Sunday afternoons we’d spend overlooking the meticulously landscaped garden from our stylish alfresco dining area.

And from $164,000 ? what a bargain!!!!

Except of course, the homes we were looking at were nowhere near the incredible price so boldly marked on the glossy brochure. If you wanted THAT version… with its airy ceilings, stone bench tops, or undercover alfresco, well you?d need to come up with at least another $100,000.

Of course, all of this was clearly explained in the fine print highlighted by that microscopic asterix at the bottom of the last page?(*home as displayed: $267,000 (mwahaha.. we had you going, didn’t we?))

The problem is, however, I now feel cheated. Sure, the fine print is there to read? but if the bold print isn?t reflecting the product you?re showing me, then I?ve gone from feeling excited, to feeling pissed and angry.

Not a great way to make your prospective customers feel!

Yet so many businesses seem to use this tactic. They show the premium version for the budget price and use the fine print to absolve themselves of any claims of misrepresentation.

Or they display a price which doesn?t include GST, postage, insurance, etc.

If I can?t take receipt of the product you’ve displayed, for the price you?ve displayed, then I?m going to feel betrayed and the chances of me buying from you drop rapidly ? even if the amount in question is only a few dollars.

Frankly I?d rather you show me the MOST it could cost to buy your product, then let me know if there?s way I can reduce that price.

If I?m not instantly horrified at the full price, chances are that?s the price I?ll pay because I?m mentally prepared for it? and I really don?t want to forgo those sexy, sleek taps and CaeserStone? bench tops.

And even if it is above my price range, if I?m given options to reduce the cost, chances are I?ll still spend more than the lowest starting price. Why? Because each option I choose to remove is seen as a saving, rather than each option I need to add being seen as an expense.

The same goes for other expenses not immediately displayed. I?d be happier to pay a few extra dollars and believe my postage is free, than get to the checkout and discover how much more it’s going to cost.

Why? Because the price advertised is actually the price I pay. And even though – intellectually – I know the postage has been built into the price, I still can’t help but feel a little thrill at “saving” $9.95 on postage and handling.

Or perhaps I?m the only one that thinks a higher – all inclusive – price is a better way to go?

8 Responses to “Why Higher Price Tags Are Sometimes Better”

  • Reply Mihad April 18, 2011at 4:29 pm

    I personally also feel cheated by the ways business go around this. My cable provider is a great example. The advertised price is $50 something dollars per month and when you sign up and give them your account ( direct debit but will be removing that ) they say oh but GST is such and such. Really, this is how you get your customers through your doors? I am glad I am not a player of this game. My prices are clearly stated on my site. If I need to change this in any way it will be stated NEXT to the prices not hidden at the bottom in size 2 font that needs a magnifying glass to be read. It isn’t about money it is principle.

    • Reply Anna Peterson April 18, 2011at 5:25 pm

      It sure is frustrating when you see something advertised at say $300, only find out you then have to fork out another $30 for GST and another $19.95 for postage. All of a sudden there’s another $50 you hadn’t factored in to your purchase decision.

      I’d rather see the same thing advertised for $349.95 + FREE SHIPPING! Not only do I know the full price up front, but I’m also feeling good about a company that has “thrown in postage for free” (even though we all know they haven’t really).

      It’s all about perception – and like you – I’d rather be perceived as someone who operates with full disclosure and tries to do the right thing by their client.

      You’re so right when you say it’s not about the money, it’s the about the principle. Couldn’t agree more!

  • Reply grant Nowell April 18, 2011at 5:08 pm

    Anna, you write some interesting things…I`ve just really started to check out your site and others for two reasons, one I`m interested in what people are saying…two, I`m trying to not get left behind with all this beautiful new social media. I said I had two reason but I have thought of more! I like to get ideas and stimulate my brain by what other people are saying or doing, its okay that I dont know these people. As an example, I just loved the blind man on you tube that you posted….I saw it by accident but I just loved it and it is still washing around in my head. Im a photographer, I`m a visual person and I love simple images that say something without crap or pretention…that message the woman wrote was simple gold which we can apply to the written word or visual stuff.
    Anyway I digress, your blog on higher prices was a pretty interesting piece..Im not `sucking up` but i do agree with you. If I am buying something I just really love it when I get the full price, the facts and a sincere smile from the person about to take my money. I guess I`m more inclined to buy something or go back to that supplier if thats what they offer me, all I want is some retail honesty without the fine print.
    I had an experience the other day, my partner and I decided to get a new rainwater tank to run off our shed, I contacted online several suppliers to organise a quote. The company I selected contacted me quickly, they sent out a bloke to quote quickly, he was a friendly man who gave me the full price…exacty what evrything would cost, he also gave me the Govt forms on rebates. I said, ” the job is yours big buddy!” Its a bit different from your example but you get the drift.
    Anyway Ive gotta go, I`m cooking tonight and I`m excited. A pasta sauce with pancetta, capers, chilli, lemon rind, anchovy, shallots, garlic, rosemary and thyme all cooked off with olive oil and white wine. Nice talking with you

  • Reply Anna Peterson April 18, 2011at 5:39 pm

    Thanks so much for such a lovely post Grant *blushing* I’m glad you found it interesting and felt compelled to add your own 2c – it really makes it worth my while 🙂

    I think in general people are looking for more honesty and integrity from the businesses they deal with… something clearly lacking from these sorts of misleading practices. People will pay – begrudgingly – once they have the full price, but why leave a sour taste in their mouth? As you said, better to have all the facts and figures up front and feel that the vendor has YOUR best interests at heart, not their own (even though we really know it’s about making the sale).

    Thanks again for your thoughts…. and now you’ve made me superbly hungry describing your dinner (YUM!!!!), I’d better go cook my own.

  • Reply Bridie Jenner April 18, 2011at 7:00 pm

    Great post Anna!

    I absolutely agree – I hate those “from” prices too.

    When we sold our house the real estate agent insisted we put a “from” price – even though the actual price we really needed was $25,000 over and above it… needless to say the house sold, but for $15,000 than we would have liked resulting in a much bigger mortgage. Next time I’ll stick to my guns!

    • Reply Anna Peterson April 19, 2011at 9:40 am

      Ah yes… we’ve had the “from” price when selling a house too. Very frustrating. I really don’t get it.

      It’s a bit like when we went to build a shed and the “base model” (from only $X) had absolutely no doors or windows!! If you wanted those, they’d cost extra *rolls eyes* Crazy!

  • Reply Adrian Brien Auto November 28, 2011at 9:21 am

    Getting people’s attention is actually quite hard. A low low price is often used as a lead generator. People make an enquiry and then if there are objections they can be dealt with by the salesperson. It’s an opportunity to talk to someone who otherwise would not have made an enquiry.

    • Reply Anna Butler November 28, 2011at 9:32 am

      Totally understand that as a marketing tactic, but where does it cross the “bait & switch” line??

      So often a low price is advertised, but the reality is, the consumer could never buy it for that price anyway (after “unavoidable” fees and charges are included, or doors/windows need to be included, etc.) End result – a customer feeling like they’ve been led up the garden path and lied to.

      And really, isn’t it better to qualify a lead who’s prepared to pay that little bit extra, rather than someone who’s only kicking tyres looking for the cheapest price and needs to be convinced otherwise?

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