The Chocolate Experiment: Decrease Price by 1 Cent, Improve Preference 2.5x (And Other Tricks)
In Predictably Irrational, Duke University behavioral economist Dan Ariely wrote about his chocolate experiment that tested varying prices for Lindt truffles and Hershey’s Kisses. When he dropped the Hershey Kiss’s price by a penny, its preference grew by 2.5x. Yet when he increased the Lindt truffle’s price by a penny, its preference grew (!) by nearly the same rate.
In my work in the trade, a client increased price for a group of products from $0.99 to $1.00 — again, a penny’s difference. This time, unit sales improved by 4x on average. Go figure.
You’ll probably recognize some of these techniques from your own work — and certainly from your own shopping.
I write about pricing tricks from the trade and academic pricing research in a new white paper, Tricks & Treatises: An Overview of Price Tools for Food, CPG, and Retail Practitioners. It covers these stories as part of 8 topics.
From the trade:
- Magic & toxic prices
- Multiple pricing
- Weight outs (or size decreases)
- Line pricing
- Anchor pricing
- Mental accounting
- The value of “free”
- Charm pricing
How do you think applying some of these practices would affect your topline? Download the paper now.