Thursday, July 16, 2009

The Sign of The Times

What do you think of when you see a dollar sign, or a $ symbol? Most likely you think money. Either parting with or receiving money. Do you give it any thought when you see a $ symbol on a menu, or a price tag? What message does it send to your customers and how do they react? These were the type of questions researchers at Cornell University asked. A recent study by Cornell’s Centre for Hospitality Research, tested how consumer spending patterns were subtly influenced, depending on including a $ symbol or not including one.

The research team created three different menus at a nearby restaurant. One included the $ sign and price ($10.00), one with no dollar sign (10.00), and a third with the price written as words (Ten dollars) . Testing their menus on 200 lunch goers they discovered that customers spent more when the price was listed without a $ sign.

One theory for this behavior is the thought that including a $ or the scripted word "dollar" created a mind set of "pain in paying" for the customer. A repetitious sub conscious cue that they were parting with real money causing them to spend less.

Although this test was focused in a restaurant setting, it stands to reason that the same principle would apply in any retail location. Removing the dollar sign from shelf or price tags might create a more positive customer reaction. No visual cue exists that they are spending real money.

Could this simple change result in higher sales? It’s an interesting theory and one that deserves some experiments in a retail setting. In these tight economic times it seems like an interesting exercise to try at Back to School time, and see if dropping a ubiquitous symbol like the $ sign converts more browsers to buyers.

No comments: