Secret to selling small plates at restaurants: Nonrounded pricing
Oh, what a difference a penny can make in the likelihood that restaurant customers will order a small plate.
A recent study published in the Journal of Hospitality and Tourism Management suggests that the key to selling small plates at restaurants lies in nonrounded pricing. According to the findings, small plate prices ending in a nonrounded number, such as .99, increase the likelihood of customers perceiving the price as fair and making the purchase.
Conversely, rounded prices ending with .00 are perceived as unfair, reducing the intention to order a small plate. The research, conducted by Stephanie Liu and Xi Yu, reveals that the psychological mechanism driving this effect is perceived fairness. By changing the price of a small plate from $5.00 to $4.99, restaurants can make customers feel better about their purchase and encourage them to order the smaller portion.
The study emphasizes the importance of understanding consumer psychology and behavior to help consumers make better decisions and improve business outcomes.
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