Robert Schindler
speaker
22 appearances
1 recordings
1 series
first heard Feb 2013
last heard Feb 2013
Robert Schindler’s voice in public audio — every appearance, attributed to the second.
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Appearances
The studies that have done experiments, clean-cut experiments, like with a direct mail catalog, where one version of the catalog had round number prices and the other 9-9 ending prices,
found a sales increase for the nine ending prices of about 8%.
We know it when we think about it, but a lot of times we don't think about it in our perceptual system.
That's active when we're doing a quick processing of numbers, basically is biased towards the first digit and doesn't fully process the rest of the digits in the number.
Let me tell you about an experiment that sort of illustrates how this happens.
If you ask people...
The difference between a price of $25 and $20 in one group and the other group, a price of $24.99 and $19.99, they're both $5 differences.
The group that had $24.99 and $19.99 will estimate a larger difference than if it's $25 versus $20.
It seems like a bigger difference because the leftmost digit changed.
There's a story about that.
And the story is that it started in the growth of department stores in the 19th century.
where there were a lot of clerks in the store that were not visible to the owner.
And so when somebody purchased something, there would be a temptation to just pocket the money rather than put it in the cash register.
So some ingenious department store manager said, well, if we lower the price from like $2 to $1.99, this is going to strongly encourage the clerk to go to the cash register to make the change.
And it just is going to help keep the clerks honest.
And that's a story...
That's been around for ages, but I don't think it's true.
We found it in lots of ads in the New York Times in the 19th century.
The retailers did it then for the same reason they do it now, because they have the strong intuition that it leads the customer to perceive the price as considerably less than it really is.
That's right.
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