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
MajorsApr 09, 2026
Tiffany & Co. Promotes Nathalie Verdeille to SVP, Chief Artistic OfficerIn her newly expanded role, she will continue to oversee the jewelry category, as well as watches, home, and accessories.
WatchesApr 09, 2026
Jacob & Co. Rolls Out Its Sequel to ‘The Godfather’ Musical Watch“The Godfather II” watch plays two melodies from the mob film’s score, “The Godfather’s Waltz” and “The Godfather Love Theme.”
Events & AwardsApr 09, 2026
JCK Announces Jesse Itzler as 2026 Keynote SpeakerOrganizers have also introduced the new JCK Talks Signature Series, as well as an offering of watch-focused workshops and lectures.
Brought to you by
Protect Your Customers and Your BusinessYou deserve to know what you are selling–to protect your customers as well as your business and your reputation.
SourcingApr 09, 2026
AGA To Honor ‘Quiet Leadership’ With New AwardThe Alan Hodgkinson Medal recognizes gemologists who are consistently generous with their time and expertise.
Weekly QuizApr 02, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
WatchesApr 09, 2026
Oris Names New CEO, CFOThe Swiss watchmaker is changing up its executive leadership team as part of a restructuring.
CollectionsApr 08, 2026
Hearts On Fire Celebrates 30 Years By Asking a QuestionThe “What’s Your Signature?” campaign invites women to think about how they see themselves.
Brought to you by
Is This You? Every Jeweler Has This Problem; We Have the Solution.Every jeweler faces the same challenge: helping customers protect what they love. Here’s the solution designed for today’s jewelry business.
SourcingApr 08, 2026
Sale of 42-Carat Blue Diamond Gives Petra a Boost in Q3The big diamond’s sale added to the company’s revenue though the market remains “challenging” overall, particularly for smaller goods.
Events & AwardsApr 08, 2026
AGS Confluence Returns with AI, Sustainability SessionsRob Bates of The Jewelry Wire will also moderate a panel on the state of the jewelry industry during the virtual event.
Events & AwardsApr 08, 2026
TJS to Honor 2 Longtime Former Stuller EmployeesThe Jewelry Symposium will honor two industry veterans with lifetime achievement awards at its upcoming May event.
TrendsApr 08, 2026
Amanda’s Style File: April’s Brilliant Birthstone With their durability, brilliance, and beauty, diamonds are the perfect stone for everyday birthstone jewelry.
MajorsApr 07, 2026
QVC Group’s Latest Filing Calls Its Future Into QuestionThe retailer failed to file its annual report on time and said it may issue a going concern warning.
GradingApr 07, 2026
GIA CFO David Tearle to Retire in June John Cowley, who has more than 30 years of experience, is succeeding Tearle as the lab’s chief financial officer.
CollectionsApr 07, 2026
Nerd Out Over Gemology Geek’s First Jewelry CollectionFounder Erica Silverglide has designed 35 colorful pieces set with fluorescing gemstones for the brand's first finished jewelry offering.
CollectionsApr 07, 2026
Ukrainian Jewelers Highlighted In New Book“Ukrainian Jewelry | Contemporary Jewelry and Art Jewelry from Ukraine” features 33 contemporary Ukrainian designers and studios.
CollectionsApr 06, 2026
Fope’s New Jewelry Debuts Are Golden“The Golden Now” campaign celebrates the here and now with the brand’s signature styles and a selection of its new pieces.
MajorsApr 06, 2026
Kecia Caffie, Corinne Bentzen No Longer With Signet JewelersSignet confirmed that Caffie, president of Zales and Banter, and Bentzen, who headed Blue Nile, have left the company.
CollectionsApr 06, 2026
Historian Tanzy Ward Pens Book on Black Victorians’ JewelryThe antique jewelry dealer talks about the importance of including Black Americans in jewelry history and preserving their stories.
SourcingApr 06, 2026
Gemfields Reports $51M Loss in 2025Both its mines faced challenges last year, from operational issues to disruptions in the market.
CollectionsApr 03, 2026
Taylor Swift’s ‘Elizabeth Taylor’ Video Puts Jewelry Front and CenterIconic pieces, like the Mike Todd Diamond Tiara, appear in the superstar’s new music video for her song inspired by the actress.
MajorsApr 03, 2026
Saks Global Says It Will Emerge From Bankruptcy This SummerThe luxury retailer, which went Chapter 11 in January, announced Thursday that it has secured $500 million in exit financing.
Events & AwardsApr 03, 2026
JCK Luxury, NouvelleBox Partner on New Designer BallroomThe NouvelleBox ballroom will feature independent jewelry designers, including Lene Vibe, Wyld Box Jewelry, and Kiaia Limited.
CollectionsApr 03, 2026
Buddha Mama Brings Its ‘Moon’ Locket To DallasThe one-of-a-kind locket, our Piece of the Week, opens to reveal three hidden images to keep close to your heart.
MajorsApr 02, 2026
Pandora Opens New Canadian Distribution Center Amid Tariff ConcernsThe new facility was also designed to better serve its growing customer base in Canada.
TrendsApr 02, 2026
Michelle Yeoh Fronts New Mikimoto Campaign The campaign is a tribute to the year 1893, when Kokichi Mikimoto created the world’s first cultured pearl.
GradingApr 02, 2026
GIA Debuts New Campus in TaiwanIt is the only GIA school to offer the GIA Graduate Gemologist program in Chinese.
