Want to know the simplest way to improve the perceived value of your product? Well, the simplest is probably to lower prices, but the second simplest way…?
‘Red prices’ isn’t some business mumbo-jumbo term that means absolutely nothing, as most business mumbo-jumbo terms do. Instead, we are talking about here simply using a red-coloured font to display your pricing. Although there is one (significant) caveat: seemingly, it will only have an impact on men.
A study conducted in the UK and US looked at the impact of colour on pricing and consumer perceptions of price. One of the more interesting findings was the impact that red fonts had on male customers – on average, men rated a perceived saving displayed in red twice as high as when displayed in black. Conversely, women were primarily unaffected by the
font colour of the price.
WHERE AND WHEN?
High-involvement shopping tasks, whereby a consumer spends far greater time and effort reaching a purchase decision (e.g. buying a car or new home), were found to reduce the impact of the ‘red price’ effect. This insight suggests that the optimal time to utilise the ‘red price’ effect is concerning impulse-purchase items (e.g. foodstuffs, entertainment media, and books) and not these high-involvement purchases.
Looking at the data on a micro level, the perceived savings difference between red and black prices is slight in percentage terms. However, from a more macro-viewpoint, with price being a critical factor in most purchase decisions, it may be that the red price effect brings a customer to your business over a competitor even though your prices may match.
Notably, the research also found that although red fonts had no significant positive impact on women, there were no negative behavioural responses. Therefore, marketing teams should feel confident in testing these findings on males without decreasing sales to female shoppers.
It’s certainly something we’ll be looking at here at Pixel. Let us know if you have found any benefit to using red prices in your marketing content.