ColumnistsDec 15, 2020
Top Social Selling Tips: A 2020 Year-End Review ColumnistsMay 04, 2021
Squirrel Spotting: The Art and Science of Customer Budgets
Peter Smith says customer budgets are rarely a true indicator of what they are willing to, or likely will, spend.
Peter Smith is president of Memoire and Hearts On Fire. He is author of two books, “Hiring Squirrels,” and “Sell Something.” Connect with Smith on LinkedIn or at dublinsmith@yahoo.com.
In recent weeks, my colleague Krista and I conducted a series of 35 interviews with some of the best salespeople in top-performing jewelry stores. We were trying to understand the bridal landscape and whether the pandemic had wrought any noticeable changes.
One of the questions we asked related to customers’ budgets. Specifically, we wanted to know how budgets came up in conversation and how often they were adhered to.
In short, we learned budgets are usually arrived at organically—as opposed to a customer being asked specifically—and once established, were rarely, if ever, adhered to.
As one salesperson said, “Once you get them emotionally engaged, price doesn’t matter.”
When I asked another top salesperson how often she exceeded the customer’s budget, she replied, “Every single time.”
If I didn’t already know these salespeople as top performers, I might have suspected a little self-congratulatory hyperbole afoot.
However, there was no doubting their pedigrees, and even if they engaged in some subtle rounding of the sharp edges (I mean, surpassing the budget every single time!), the pattern of exceeding budget was consistent across virtually all interviewees.
Naysayers might argue those salespeople are engaging in predatory practices, that they are cajoling and coercing their customers into spending more than they want to. Alas, the science suggests otherwise.
Related stories will be right here …
One of the questions we asked related to customers’ budgets. Specifically, we wanted to know how budgets came up in conversation and how often they were adhered to.
In short, we learned budgets are usually arrived at organically—as opposed to a customer being asked specifically—and once established, were rarely, if ever, adhered to.
As one salesperson said, “Once you get them emotionally engaged, price doesn’t matter.”
When I asked another top salesperson how often she exceeded the customer’s budget, she replied, “Every single time.”
If I didn’t already know these salespeople as top performers, I might have suspected a little self-congratulatory hyperbole afoot.
However, there was no doubting their pedigrees, and even if they engaged in some subtle rounding of the sharp edges (I mean, surpassing the budget every single time!), the pattern of exceeding budget was consistent across virtually all interviewees.
Naysayers might argue those salespeople are engaging in predatory practices, that they are cajoling and coercing their customers into spending more than they want to. Alas, the science suggests otherwise.
Research shows customers not only want to spend more, but feel better when doing so, and, as if to put a cherry on top, perceive the quality to be better when they do spend more.
Whether it is offered or uncovered during the sales process, the budget is a function of a cognitive process; cool, calculated, and sober.
It lacks context beyond the most basic measures, and it is rarely indictive of what the customer is willing to spend, or likely will spend, unless they are underserved by a salesperson.
To a great extent, a customer’s budget expands commensurate with the level of their emotional engagement with the salesperson. It’s as if the customer is saying, “Here’s my budget, but feel free to inspire me.”
In “Handbook on the Psychology of Pricing,” Dr. Markus Husemann-Kopetzky wrote, “Higher prices induce consumers to perceive product quality as better during actual consumption.”
There have been numerous studies over the years, across myriad product categories, to support Husemann-Kopetzky’s hypothesis.
As one of the bridal interviewees suggested, “Customers want to be guided.”
The salesperson who uttered that beautifully uncomplicated, yet profound, opinion might have said, “Customers want to be guided by a competent salesperson, interested in delighting her customers, and inspiring them to higher ambition, and who recognizes the budget for what it is, arbitrary and devoid of context.”
Even the most jaded observers might concede the best salespeople have a way of working their way into the emotional fabric of their customer’s stories and, as such, succeed in influencing their buying behavior.
A Gallup study some years back concluded that emotionally engaged customers deliver a 23 percent premium over average customers. We see that reality play out consistently, thanks to top salespeople.
In “Brainfluence: 100 Ways to Persuade and Convince Consumers With Neuromarketing,” Roger Dooley wrote: “On one hand, we know that the pain of paying kicks in when people perceive that a product is overpriced and makes people less likely to make a purchase.
“But now we have multiple studies showing that people enjoy a product more when they pay more for it.”
The hypothesis naturally assumes that the product is, in fact, better quality, and that customers are not being asked to overpay for mediocre or subpar jewelry.
A wonderful vehicle to help increase sales is utilizing a combination of two principles: the paradox of choice and the contrast or anchoring principle.
Whether it is offered or uncovered during the sales process, the budget is a function of a cognitive process; cool, calculated, and sober.
It lacks context beyond the most basic measures, and it is rarely indictive of what the customer is willing to spend, or likely will spend, unless they are underserved by a salesperson.
To a great extent, a customer’s budget expands commensurate with the level of their emotional engagement with the salesperson. It’s as if the customer is saying, “Here’s my budget, but feel free to inspire me.”
In “Handbook on the Psychology of Pricing,” Dr. Markus Husemann-Kopetzky wrote, “Higher prices induce consumers to perceive product quality as better during actual consumption.”
There have been numerous studies over the years, across myriad product categories, to support Husemann-Kopetzky’s hypothesis.
As one of the bridal interviewees suggested, “Customers want to be guided.”
The salesperson who uttered that beautifully uncomplicated, yet profound, opinion might have said, “Customers want to be guided by a competent salesperson, interested in delighting her customers, and inspiring them to higher ambition, and who recognizes the budget for what it is, arbitrary and devoid of context.”
Even the most jaded observers might concede the best salespeople have a way of working their way into the emotional fabric of their customer’s stories and, as such, succeed in influencing their buying behavior.
A Gallup study some years back concluded that emotionally engaged customers deliver a 23 percent premium over average customers. We see that reality play out consistently, thanks to top salespeople.
In “Brainfluence: 100 Ways to Persuade and Convince Consumers With Neuromarketing,” Roger Dooley wrote: “On one hand, we know that the pain of paying kicks in when people perceive that a product is overpriced and makes people less likely to make a purchase.
“But now we have multiple studies showing that people enjoy a product more when they pay more for it.”
The hypothesis naturally assumes that the product is, in fact, better quality, and that customers are not being asked to overpay for mediocre or subpar jewelry.
A wonderful vehicle to help increase sales is utilizing a combination of two principles: the paradox of choice and the contrast or anchoring principle.
Editors' Picks
Sponsored by
The paradox of choice suggests we offer three options when it comes to presenting products.
Anchoring works by having three distinct price points within those three options.
One option should be at the stated budget, a second option should be twice the budget, and a third should be right between those two anchors.
Customers select the second option more than 60 percent of the time. In its most simplistic form, that is a 50 percent premium over the budget.
Accepting the customer’s budget as fact underserves the business and places unnecessary limitations on the customer’s ability and willingness to reach when they are moved to do so.
It also misses the underlying psychology of the joy customers experience when making an important purchase, the regret avoidance (not having to second guess the purchase) that comes with doing the right thing, and the added pleasure and enjoyment customers derive from buying exceptional quality.
When the perfumer Ernest Beaux warned Coco Chanel the amount of jasmine he was including in what became Chanel No. 5 would make the fragrance fabulously expensive, the soon-to-be fragrance and fashion icon responded, “In that case, add even more.”
I wonder how that worked out!
Anchoring works by having three distinct price points within those three options.
One option should be at the stated budget, a second option should be twice the budget, and a third should be right between those two anchors.
Customers select the second option more than 60 percent of the time. In its most simplistic form, that is a 50 percent premium over the budget.
Accepting the customer’s budget as fact underserves the business and places unnecessary limitations on the customer’s ability and willingness to reach when they are moved to do so.
It also misses the underlying psychology of the joy customers experience when making an important purchase, the regret avoidance (not having to second guess the purchase) that comes with doing the right thing, and the added pleasure and enjoyment customers derive from buying exceptional quality.
When the perfumer Ernest Beaux warned Coco Chanel the amount of jasmine he was including in what became Chanel No. 5 would make the fragrance fabulously expensive, the soon-to-be fragrance and fashion icon responded, “In that case, add even more.”
I wonder how that worked out!
More on Columnists
The Latest
EditorsJun 22, 2026
15 Pieces of Jewelry That Brought Us Joy in Vegas Whether they evoked nostalgia, wonder, or laughter, these jewels put a smile on our faces.
Events & AwardsJun 22, 2026
Plans Announced for New Trade Show in BaselScheduled for April 2027, Basilia will be the first watch and jewelry trade show held in Basel since the collapse of Baselworld in 2020.
Events & AwardsJun 22, 2026
Gem Awards Opens 2027 Nomination PeriodSubmissions for the milestone 25th annual Gem Awards will be accepted across three categories from now through July 31.
Brought to you by
Wedding Band Trends 2026: Personalization Takes Center StageColored gemstones, artisan finishes, mixed metals, and meaningful details are shaping demand in bridal jewelry.
WatchesJun 22, 2026
Snoopy Inspires New ‘Flying Ace’ Ball WatchThe beloved beagle dons his aviator outfit for the new Engineer Master II Snoopy Flying Ace timepiece.
Weekly QuizJun 17, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
AuctionsJun 18, 2026
Paraíba Tourmalines Sell for $3.4M at Sotheby'sThe recent high jewelry auction, which also featured the sale of a 10-carat blue diamond, was “a celebration of color.”
CollectionsJun 18, 2026
Michelle Obama Wears Almasika Earrings Symbolizing Feminine PowerShe wore the “Le Cauri Endiamanté” earrings, our Piece of the Week, in the Obamas’ first dual portrait for the Obama Presidential Center.
Brought to you by
Building the Future of Jewelry Retail: DCA Expands Education, Leadership Development, and Workforce SolutionsDCA is preparing the next generation of professionals by supporting workforce development, leadership growth, and career advancement.
PodcastsJun 17, 2026
Episode 6: Las Vegas 2026-Trends, Traffic, Broken BathroomsCouture’s Michelle Orman joins Amanda Gizzi and Michelle Graff for this special post-Market Week episode of My Next Question.
GradingJun 17, 2026
SSEF Issues Warning on Refilled EmeraldsThe lab is seeing emeralds with filler added post-testing enter the market, accompanied by reports that indicate little to no treatment.
WatchesJun 17, 2026
Patek Philippe’s ‘Visionary’ Leader Philippe Stern Dies at 88 The third generation of the Stern family to head Patek Philippe, he navigated the “quartz crisis” and preserved the brand’s independence.
MajorsJun 17, 2026
James Avery to Revamp In-Store Retail ExperienceThe Texas-based jeweler is gradually rolling out a new experience-forward layout in its stores.
MajorsJun 17, 2026
Seahawks’ Super Bowl Ring Blends Meaningful Design, Technical CraftsmanshipThe Super Bowl LX champions were honored with diamond and blue sapphire rings by Jason of Beverly Hills.
Policies & IssuesJun 17, 2026
Community for Ethical Jewelry Names New Executive DirectorMarianna Smirnova previously spent a decade working with the Responsible Minerals Initiative, in addition to other relevant roles.
MajorsJun 16, 2026
5 Things to Know About the 2026 NBA Championship TrophyThe New York Knicks took home the Larry O'Brien Trophy crafted by Tiffany & Co.
TrendsJun 16, 2026
Post-Vegas Jewelry Trend Report: Big Beads, Western Flair, White MetalsAssociate Editor Natalie Francisco lists the trends she spotted during Jewelry Market Week that will dominate the second half of 2026.
SourcingJun 16, 2026
GemGuide Updates Ruby PricesIts app now reflects increased prices for Mozambique ruby, as well as changes to its Burma ruby charts.
MajorsJun 16, 2026
Sasha Primak Hires New Design DirectorThe manufacturer has tapped Alicia Arnold, the former director of custom design at Tiny Jewel Box.
IndependentsJun 15, 2026
DeBoulle Diamond & Jewelry to Renovate Dallas FlagshipThe revamped, elevated space will feature a two-story Patek Philippe atelier and a rooftop patio for parties.
WatchesJun 15, 2026
G-Shock, Coca-Cola Partner on Bottle-Inspired WatchThe special-edition piece marks the 140th anniversary of the iconic beverage brand.
TrendsJun 15, 2026
Amanda’s Style File: Tiny Charms Are TrendingHere are 13 small charms to inspire your layered looks this summer.
AuctionsJun 12, 2026
16th-Century ‘Hogback’ Diamond Ring Going Up for Auction in LondonFound by a metal detectorist, the ring likely belonged to a wealthy, possibly royal, owner, said Noonans.
CollectionsJun 12, 2026
Chouette Designs To Launch Collection Celebrating All Types of LoveOur Pride Month Piece of the Week, the “Margaux” ring, is part of the wife-and-wife team’s new “Lovestoned” collection.
Events & AwardsJun 12, 2026
CBG Announces Plans for Phoenix ShowThe group has named the keynote speaker and announced a new pavilion for its next event, which is slated for September.
EditorsJun 11, 2026
This Was the Best Animal Jewelry in Las Vegas From lions and hippos to snails and fish, Senior Editor Lenore Fedow wrangles her picks for cutest jewelry critters in Las Vegas.
SourcingJun 11, 2026
Grandview Klein, London Jewelers Partner To Cut 63-Carat RoughThe big stone will be fashioned into a 20.26-carat diamond in celebration of the retailer’s 100th anniversary this year.
MajorsJun 11, 2026
Former Cartier Creative Director To Head Chanel’s Jewelry Creation StudioMarie-Laure Cérède will join Chanel as the new director of its jewelry creation studio, starting in October.
