Internet Marketing – The appearance of truth!? -1

How verisimilitude – the appearance of
truth – can improve your pricing

Today I’d like you to think about why
you should use verisimilitude – the
appearance of truth – in your pricing.

To help, I’ll first need to tell you a
little about the research behind it,
and then I’ll explain how you can apply
what you’ve learned to reap the rewards
in your own business.

Rounded prices rely on emotions,
non-rounded on cognition

In 2015, Wadhwa and Zhang – two
Assistant Professors of Marketing –
wrote: “Because rounded numbers are
more fluently processed, rounded prices
encourage reliance on feelings. In
contrast, because non-rounded numbers
are disfluently processed, non-rounded
prices encourage reliance on
cognition.”

Theirs was the first
research that examined the impact of
rounded prices on people’s decision to
buy a product – and more specifically
that was based on whether the decision
was driven by feelings or by cognition.

But what on earth does that mean in lay
terms?

So what does that mean for accounting
professionals?

Essentially, their findings mean that
whether we should offer a rounded price
or not depends on whether people will
base their decision to buy whatever it
is we’re selling on emotion, or logic.

To illustrate, here’s a concrete
example.

First, imagine the number
£19.86. It’s what’s known as a more
precise number.

And what the research
shows is that a precise number is
better if we’re purchasing things that
are logical.

In contrast, £19 would be
better if we were purchasing something
based on emotions. A good example might
be food. When we buy we’re thinking
about our stomachs and so we tend to
buy based on emotion.

(That’s why – if you think for a moment

about the last
good-quality restaurant you visited –
they probably used rounded numbers in
their pricing.)