Behavioural lessons from a big breakfast
Monday, May 11, 2015/
Let’s test our behavioural skills with an “in the wild” example.
What could this business have done differently to make its “Big Breakfast” offer even more enticing?
In business we have hundreds of tiny decisions to make every day, and imagine that this day you have to decide how best to advertise your breakfast offer. What should you call it? What image should you use? What should the offer include? How should it be priced?
Thankfully we can reduce the challenge of those decisions by drawing on what we already know from behavioural science. In this case I want to focus on the way the pricing is displayed.
Let’s assume in this market that a $15 breakfast is an attractive deal (otherwise it would be strange to promote it).
Two things this business could have done to make this deal seem even better.
$14.90 rather than $15.00
When we see a number we mentally rehearse it in our mind. Saying “fourteen” rather than “fifteen” makes us perceive the price is lower. As an example, if I were to ask you how much petrol is at the moment (say 134.99) I expect you will recite to me the numbers to the left of the decimal (i.e. 134) rather than round up to the full number (i.e. 135). For the sake of a few cents I would therefore recommend this business go with a $14.90 or $14.95 big breakfast offer.
$15 rather than $15.00
However, if this business was adamant it wanted to go with $15 then there’s something else it can do. You see decimals elongate the number, taking us longer to process and leading to a perception that the number is bigger than it actually is. In this case the business should simply have gone with $15 rather than $15.00 making the number seem shorter.
But Bri, didn’t you just recommend $14.90 rather than $15.00? Yes. The mental rehearsal of a lower number will still trump decimals.
Use of dollar sign
As a bonus round some of you might also have queried the use of a dollar sign. Strange as it seems, researchers have found that dollar signs trigger in people negative associations with money, resulting in less being spent in restaurants with dollar signs on their menu vs. those without.
The lesson for menu design therefore is to drop the dollar sign. However, in this case the business needs to signal that 15 is the price as distinct from the item number, their address or the quantity of breakfasts, so the dollar sign is doing its job appropriately. That it is small relative to the number is also a good move because it serves to de-emphasise the price signal.
Bri Williams runs People Patterns, a consultancy specialising in the application of behavioural economics to everyday business issues.
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