One of the most important tactics in pricing is the practice of ending prices with the number nine, and it is known as charm pricing. There are conflicting theories about how it started, but it has been in heavy use for as long as anyone reading this has ever known.
Many florists avoid charm pricing because they consider it to be in poor taste, but there is ample research proving that it strongly suggests value, savings, and a relatively low price – and triggers additional sales as a result.
Other florists use charm pricing just because, well, it seems like everyone else does. These florists are overlooking the research that shows that charm pricing can also send a negative message about their brand and the quality of their flowers.
There are good arguments to be made for either approach, with tons of great research to back them up. It's too important a decision to make just on instinct, and this site has a lot of information on what approach is best.
Also – a look at consumer price sensitivity. Unlike the standard usage of price sensitivity, which looks at price elasticity of demand, this looks at how sensitive a consumer is to price.
Some are not very price sensitive (barely look at the price tag) while others are highly sensitive (wait for a sale). To further complicate things the price sensitivity of an individual consumer is always changing, based on the product and situation.
A blog post looked at the other benefits of a loss leader strategy. It is usually assumed that this is done just to get people through the door so that they might then buy other things, but there are other benefits.
For example – being the cheapest provider of one thing might suggest that all your prices are relatively low.
Another blog post looked at how prices are expressed, and how using less syllables can make a price seem smaller. It is interesting research, with serious implications for the flower business, where prices are so often spoken over the phone. You can increase sales and order values by simply expressing prices in ways that make them seem smaller.
Beyond Cost Plus is sponsored by FloristWare – the most popular independent POS software for flower shops.