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There's an old story — it may even be true — about two barber shops in Brooklyn across the street from each other.
The "barbers" were actually barber-school interns practicing on willing customers. The competition led to a price war. One shop offered haircuts for 75¢. The shop across the street advertised haircuts for 60¢.
Rather than lower their price, the 75¢ shop put a sign in the window: WE REPAIR 60¢ HAIRCUTS.
Price isn't everything. But it's close.
Every marketer knows the most powerful word in advertising is FREE (often spelled with an exclamation point). Master copywriter Bob Bly wrote that the second most powerful offer is $1. Even when that dollar offer is for an add-on to a product costing a few hundred, the lure of the single dollar can be irresistible. Why?
Bly suggests it might be the rarity of the offer.
I would add that people who've heard the old adage, "There's no such thing as a free lunch" (sometimes abbreviated TINSTAAFL), find the dollar price more credible, however incredible that may be.
I was a kid when I learned from my Romanian immigrant great-uncle the art of bargaining. I call it hondling with care. It can look like an argument, but it's more of a ritual folk dance.
Counterintuitive as it may be to some of us, in Western culture, there's an attitude where spending becomes a status symbol. Keeping up with the Joneses instead of with the Cohenses.
I do enjoy good scotch. It's a family trait. But 20-odd years ago, when my son and I were in a duty-free shop in Milan, I saw a bottle of aged Laphroaig for €750. That's Euros, not dollars. At the time, it was close to $1,000.
I had a fleeting impulse — about a nanosecond — to buy it for my brother, zt"l. (A nanosecond is one billionth of a second. Or, as a computer programmer once defined it to me, "It's the length of time it takes in New York from when the light changes until the guy behind you beeps his horn.")
I later asked my brother if he would be able to drink a thousand-dollar bottle of whiskey. He couldn't. He had too many places to put that kind of money.
Alas, what used to be a good drink turned into a status symbol. And the price wars turned into a competition of who could spend more, which drove up prices for guys like me.
There's one brand of scotch (I won't say which) that costs a bundle, but to my palate, it tastes like it was diluted. It's made for people who don't like to drink, but need to have expensive liquor just for show.
Let me tell you about Dr. Robert Cialdini, a psychologist who wrote a book to expose the techniques of manipulators that took advantage of people like him, who were "an easy mark": Influence — The Psychology of Persuasion.
In a delicious irony, Dr. Cialdini's expose of the tactics of manipulation became required reading for marketers. And today, he runs a consultancy on persuasion and marketing.
In his book, Cialdini tells about a friend who ran an Indian jewelry store in Arizona. She had trouble selling some turquoise jewelry. "Finally, the night before leaving on an out-of-town buying trip, she scribbled an exasperated note to her head saleswoman, ‘Everything in this display case, price × 1/2.'"
A clearance sale, she figured was better than no sales at all. When she came back, all the items had been sold. But they weren't sold at the 1/2 price she said in her note. The saleswoman had misread the scribbled note; she only saw the 2. So she doubled the price.
Since Cialdini's a psychologist, his friend asked if he could explain why the jewelry she couldn't sell went at double the price.
He explained it in terms of a "trigger." The wealthy tourists who came into the shop automatically assumed "expensive = good." The high price meant high quality.
Or how about the publicity stunt pulled off by Payless Shoe company? To promote the quality of their low-end shoes, they took over a former Armani store and created a fake brand called Palessi.
Then they invited fashion "influencers" to an event announcing the new exclusive brand. They took shoes that normally cost $40 and charged $600 for them. The fashionistas gushed about the shoe designs … until they found out they had been fooled. Payless refunded the money and everybody had a good laugh.
I can't say there's any connection, there were many other factors, but a year later, Payless filed for bankruptcy.
OK, so what's the big deal, you ask, if someone overpays for shoes or whiskey? Doesn't the market determine the price?
Well, maybe. But Instacart ran into trouble doing in-store price testing when a customer happened to notice that the customer before him paid almost $2 less for the same cereal box. That could get ugly.
But even more disturbing is when the government takes your tax dollars and spends it on loony experiments.
Every year, Senator Rand Paul publishes a collection of such spending. How about the Department of Veterans Affairs (VA) spending over $1,079,360 teaching teenage ferrets to binge drink alcohol? Talk about overpriced liquor!
And how about this monkey business? The National Science Foundation (NSF) and other federal agencies spent $14,643,280 to make monkeys play a video game. I don't know which monkeys won, but we definitely lost.
And let's not forget the $200 thousand to make up for the insult to Giovanni de Verrazzano (or was it $350 thousand? What's $150 thousand between friends?) If you missed it, then Governor Cuomo shelled out the money to replace 96 misspelled bridge signs because one letter z was left out.
Spelling counts … and costs.
The explorer Giovanni de Verrazzano lived in the 16th century. That's a long time to hold a grudge.
(COMMENT, BELOW)
Mordechai Schiller is an award-winning columnist and headline writer at Hamodia, the Daily Newspaper of Torah Jewry, where this first appeared. His column has won two awards -- so far -- from the American Jewish Press Association.
Previously:
• Are We Having Font Yet?
• Why Smart People Do Dumb Things
• There is nothing so sad as a stupid Jew
• Asking For It