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Using Price Reframing To Sell More - Latest Research - The Communications Blog - Birchills Telecom

Using Price Reframing To Sell More - Latest Research - The Communications Blog - Birchills Telecom

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Using Price Reframing To Sell More - Latest Research

Birchills Telecom
Published by in Sales Communication ·

Price framing is the tactic used by businesses to influence the customer to buy something by framing discount(s). The latest research published in the Journal of Retailing and Consumer Services by Miyuri Shirai, based at the Faculty of Business and Commerce, Keio University, Japan has looked at three tactics – these are:

Temporal reframing of prices (TRP)
TRP reframes the prices as smaller amounts based on time divisions that people use in everyday life, such as “£1.68 a day” or “£11.68 a week” or “£607.36” a year

Measure-based unit pricing (UP)
UP reframes the prices as smaller amounts based on  measured quantities that people use in everyday life, such as “£1.68 a pint” or “£13.44 a gallon” or “£607.36”

Usage-based UP
Usage-based UP reframes the prices based on usage. So for example  “£1.68 per serving “ or “11.68 per gigabyte used”
These tactics lets people to consider prices from different aspects.This in its turn can lead to different purchasing decisions.
Now we understand the terms we can ask some interesting questions

Which tactic generated the most understanding and buying decisions from consumers?

Usage-based UP was evaluated as being the most understandable. Usage-based UP is closest to the thoughts consumers generate in everyday life and it seems to fit this type of consumers’ way of thinking. Time reframed pricing came in a close second with measure based reframing lagging significantly. Measure based reframing gave levels of buying decisions close to no reframing.

The research was carried out using a seven point scale for buying intentions, varying from 7 very likely to buy to 1 very unlikely to buy and the results were:
No reframing the price – the high results was 3.8
TRP reframing – 4.68
Usage based reframing – 4.73
Measure based reframing – 4.07

These findings have practical implications for companies. The role of measure-based UP seems to make price comparisons easier among similar products.  However, people may prefer not to receive such information because they feel reluctant to expend time and effort making comparisons. This information itself does not generate any beneficial information unless there is the opportunity to compare it with similar products. So, for those people who want to quickly obtain more additional information regarding prices without comparing products, usage-based UP may be the way to go as this information relates to actual consumption.

What is more, this information may make people pay more attention to usage times or consumption speed, which in turn might reduce their level of price consciousness.

Conclusion
This research shows that usage based reframing is the best choice if you are considering the three options.




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