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Norman Sperling
2625 Alcatraz Avenue #235
Berkeley, CA 94705-2702

cellphone 650 - 200 - 9211
eMail normsperling [at] gmail.com

Loyal Old Customers

© Norman Sperling, June 21, 2011

I was talking business with another proprietor of a decades-old science business. We both have loyal customers. For both,
* most pay by check, instead of credit card or PayPal
* a few fill out their checks by typewriter (yes, in 2011)
* a few don't like the prices' .95 and round their checks up to .00
* none of their checks bounce.

The "typewriter" aspect no doubt marks people who have not fully adopted computers, because hardly anyone else keeps a typewriter handy. Customers who have been loyal for decades are, by definition, older, so this is no surprise.

The preference for checks is not just a failure to adopt newer technologies, since credit cards became very common by the 1960s. Some feel less secure about giving out their credit card numbers.

Their checks are always good. They want the product, and they'll want the next one too. They're quite content to transfer the money. They don't begrudge the price. It is tempting to read into this the high ethics of science, too.

Paying the rounded dollar instead of the .95 shows these customers' rationality overpowering their emotional reaction to the price. I've never heard of this happening outside of science businesses. Lots of business have thought of charging rounded prices, and many have tried it. Sales slump horribly. Customers only buy when prices end in .95 or .97 or .98 or .99. Only merchants that end their prices that way survive. I once raised the price of an item from $4.35 (which was determined by standard pricing formulae) to $4.95, and thereby markedly increased sales. That's the way customers want things ... except for this extreme intellectual fringe, who are so repulsed by that practice that they send $27.00 for a $26.95 product. They have no way of knowing what a pricing formula would actually call for - the formulaic price might actually end in .31 or .78 or anything else.

The Journal of Irreproducible Results
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What Your Astronomy Textbook Won't Tell You

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