If you’ve been trying to find cheap office supplies online or discount stationery in your town, then right now you’re probably feeling like you’ve stumbled onto the set of Carry On At The Circus. It’s difficult to get a read on what’s the right price to pay for pens, paper, printer ink or biscuits – specially when you’re ordering in big amounts. Whomever your supplier is, you’re likely to achieve massive savings over high-street prices.
On the other hand, you can still wind up paying 2 to 3 times within the odds. A price reduction promotion or buy-one-get-one-free offer is actually a warning signal, and almost certainly forms element of a pricing strategy which will view you paying more for stationery and office supplies.
If you’re a monetary director or office administrator, you might be clued into the big secret – but for the rest individuals, here’s usually the one secret that’s likely to wipe off just as much as half your office supplies expenses in one swift movement:
Stop looking for discounted office supplies – It’s not just a call to arms over quality control – for some situations, it may even be appropriate to get the cost option instead of the high-end one. Nor could it be about wastage and logistical planning, although proper cost analysis is a crucial component of controlling your office budget. Rather, it’s an issue of Bayesian signalling; Gricean logic; and, ultimately, fundamental principles of pricing. Even though there are complicated concepts at work, it boils down to simple human nature.
We’re hard-wired to go after the option using the big shiny ‘discount’ sticker on the front – even when it’s higher priced. It’s a bizarre little quirk from the human brain, and something that’s hard to switch off – as US retailer JC Penney discovered to their ongoing regret.
Back in 2012, the supermarket giant announced that they were putting a stop to their promotional pricing strategy, which saw everyday staples with a permanent discount. Like most supermarkets, JC Penney was artificially inflating their shelf prices before offering them an arbitrary discount. Sometimes, a 50% discount was really a 10% increase on the recommended list price.
The incoming CEO Ron Johnson announced a shift to an alternative, ‘honest’ system of pricing without the fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or other shifty tactics. The newest system was intended not just in lower prices, but to aid consumers make informed decisions regarding their groceries and budgets. The reality that Honourable Ron became Jobless Johnson within less than a year probably informs you how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with a feeling of anger over whatever they regarded as a betrayal; revenue and share price went into freefall; as well as the company quickly returned to their previous strategy of artificial markdowns. When offered exactly the same products having a lower pricetag, customers still preferred to cover the larger price – as long since it had a discount sticker on it.
In fact, JC Penney customers were so offended from the disastrous strategy that brand loyalty not just went down, with perceived trustworthiness falling as prices decreased; but stayed down too. The company actually issued an apology to jilted shoppers, nevertheless the customer base stayed away until prices were raised – in some cases more than they originally were. A niche commentator had this to say:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. Exactly what it has discovered is the fact that prices of certain items-designer furniture, in particular-have risen by 60% or maybe more at JC Penney almost overnight. 1 week, a side table was listed at $150; a few days later, the “everyday” price for the same item was up to $245.”
Discount pricing strategies are basically par for the course on the high-street – and, because the BBC uncovered, many of them are as arbitrary and misleading as JC Penney’s. And, for the most part, they create sense from the B2C perspective. The Chartered Institute of promoting claims that attention spans are limited to 8 seconds, rather than the 12 seconds they were in early 2000s.
We live in the information age: a arena of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers want to make decisions quickly according to limited information. Discounting is an immediate recognisable signal which a wise purchasing decision will be made, (whether true or otherwise not).
* For a person associated with B2B procurement, however, discount pricing needs to be public enemy number 1.
* Unfortunately, every workplace from your local chip shop for the state of New York has at one time or some other fallen victim to the same ruses that function in the supermarket.
* Promotional pricing strategies in the office
* It’s often said disparagingly of politicians which they don’t know the price of a pint of milk, (or in the case of the mayor of brand new York, the cost of a pen and paper).
In most honesty, however, none people do. Milk, bread, along with other staples are generally far less expensive than they should be – for numerous reasons:
They may be used as being a loss leader, to draw in in customers who’ll then pay more for other things.
They may be inferior-quality versions employed to undercut competitors.
They could be bundled along with other items included in an up-sell; sandwich-drink-and-snack deals at lunchtime are a great example, but you will find invisible examples like coffee strainers and coffee (or printer and printers).
They might be utilized to build trust or complacency within the shopper, who will often judge all of the prices of the retailer based on the first or most frequent items which they buy from them.
They could use tricks of human perception – such as charm pricing (like.9 or.7); pricing under benchmarks (including £1, £5, £10 and so forth); or even just including information seems relevant but isn’t. A thing that is advertised as “Only £1.99 when you buy 2!” may look like a reduction, however if the single unit costs £0.99 then it’s actually more costly.
All of the tricks outlined above, employed for milk and bread, apply equally well to equivalent office basics like pens and paper. You can verify that yourself with just a few minutes of searching – or checking your most current receipt.
In day-to-day life there’s not much we can do concerning this kind of obfuscation. Only a few folks have time, resources or inclination to investigate and compare grocery prices upon an item-by-item level – as well as the opportunity costs of rushing from supermarket to supermarket in the quest for the most affordable potatoes by gross weight in reality probably reeydf the benefits. That’s why JC Penney’s consumers are slowly returning because the charges are rising.
A company facing similar purchasing options, however, has the main benefit of an economic director to guard its decision-making process.
There’s still scope, even or possibly especially in age of information, to possess someone on staff who can perform considered, researched procurement. Someone who can take time to perform a proper cost analysis; take part in slow thinking; and come to some conclusion based upon facts rather than on sound and fury.
While honesty didn’t work out so well for Ron Johnson, we at CP Office still think that it’s both worthwhile and worth a shot. So, unlike various other stationers and vendors of office supplies, we prefer to offer an impartial cost analysis to the potential customers, along with the benefit of our genuinely huge discounts. With CP Office, there’s no fuss with no tricks – just a sincere discussion about what’s best for you as well as your office.