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
CollectionsSep 28, 2026
De Beers London Drops Water-Inspired High Jewelry Collection“Vibrations” features several firsts for De Beers’ high jewelry, including the use of chalcedony and diamonds sourced from artisanal miners.
CollectionsSep 28, 2026
Jessica McCormack Turns to Classic Motif for New CollectionThe “Bows” collection features three interpretations of the bow motif designed with Georgian and Victorian influences.
Events & AwardsSep 28, 2026
Guy Borenstein, Troy Underwood Among the Professionals Honored at AGS Conclave 2026The American Gem Society recognized industry members, one Guild, and a law enforcement official for their contributions to jewelry.
Brought to you by
Meet Gemology’s Next Generation Microscope: GIA® Gemolite® NXT Professional EditionExperience gemstones with greater precision and comfort than ever before.
FinancialsSep 28, 2026
Instappraise, Jewelers Mutual Look to Simplify Jewelry InsuranceThrough a new system integration, customers can now receive instant personal jewelry insurance quotes at the time of appraisal.
Weekly QuizSep 25, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
WatchesSep 25, 2026
Smaller Rolex Watches Showing Strength on Secondary Market, Data ShowsFive of the 10 fastest-appreciating Rolex models on Bob’s Watches were Datejust 31 or Lady Datejust watches.
MajorsSep 25, 2026
Sherwood Family Buys Back Daniel’s Jewelers from Private EquityThe Sherwood family and AJS Creations CEO Tejas Shah purchased the jewelry chain back from Palladium Equity Partners.
Brought to you by
Your Piece Could Be the One Editors Talk AboutSubmit your pieces for a chance to win in this year's competition.
Lab-GrownSep 25, 2026
Brilliant Earth Collabs with Elizabeth Taylor Estate on Jewelry Collection“The Elizabeth Taylor Collection” uses lab-grown diamonds and gemstones in contemporary designs inspired by the icon.
TrendsSep 25, 2026
A Peek at Taylor Swift’s Game-Day DiamondsThe artist wore Dana Rebecca Designs’ marquise diamond-set gold hoops at the Chiefs game last Sunday. Now they’re our Piece of the Week.
CrimeSep 24, 2026
From Conclave: Security Measures Jewelers Should Be TakingJSA and Jewelers Mutual shared advice on spotting suspicious behavior, combatting cell phone jammers, and staying safe at home.
AuctionsSep 24, 2026
8-Carat Blue Diamond Heads to UK Jewelry AuctionThe fancy light blue diamond is estimated to fetch up to $2.6 million at Elmwood’s next week.
TrendsSep 24, 2026
This New Jewelry Book Decodes the Secret Meaning in Victorian Jewelry“Secret Language of Victorian Jewelry” unveils the meaning behind the symbols, motifs, and gemstones used in Victorian-era jewelry.
Lab-GrownSep 24, 2026
Kira Jewels Opens B2B E-Commerce Portal for Lab-Grown Diamond Jewelry KIRAJewels.one gives retailers access to more than 500 SKUs of lab-grown diamond rings, earrings, necklaces, and bracelets.
TrendsSep 23, 2026
Holiday Diamond Jewelry Trends: Layered Looks, PersonalizationThis holiday season, look to pieces that will help to fill out customers’ everyday diamond jewelry wardrobe, experts say.
SourcingSep 23, 2026
Organization That Promotes Natural Diamond Rebrands for Third Time The Natural Diamond Council is now The Diamond Collective and has announced a new strategy under CEO Amber Pepper.
IndependentsSep 23, 2026
This Milwaukee-Area Jeweler Is Serving the 7CsPaul’s Jewelers sells coffee, chocolate, and cookies from a custom gold-wrapped trailer parked outside the store starting at 7 a.m.
MajorsSep 23, 2026
Kay Jewelers’ New Campaign Goes ‘All In’ on LovePart of its brand relaunch, the marketing around the campaign includes a contest involving a jacket set with 550 diamonds.
Events & AwardsSep 23, 2026
Tiffany & Co. Exhibition Opening at Arkansas Museum The curation, opening soon at the Crystal Bridges Museum of American Art, honors the jeweler’s heritage through a distinctly American lens.
CollectionsSep 23, 2026
Pucker Up for Pandora’s New Pat McGrath Jewelry CollabThe jewelry giant has partnered with the famed makeup artist to create a colorful new collection of charms and rings.
IndependentsSep 23, 2026
Texas Jewelers Association to Celebrate 120th AnniversaryThe association will mark the milestone at its convention next month.
IndependentsSep 23, 2026
Sissy’s Log Cabin’s ‘Back to School and Bling’ Event ReturnsThe jeweler donated school supplies to Memphis, Tennessee, students during the event combining basketball and mentorship.
MajorsSep 22, 2026
Foundrae’s Lawsuit Against Pandora Can Continue, Court RulesA federal judge denied Pandora’s motion to dismiss Foundrae’s claim for copyright infringement of its medallions.
IndependentsSep 22, 2026
Constance Polamalu Named to '40 Under 40' ListThe Baltimore Business Journal recognized the entrepreneur for her leadership in business and the jewelry industry.
GradingSep 22, 2026
GCAL by Sarine Opens New Lab in MumbaiThe facility is located within SEEPZ and is GCAL by Sarine’s second location in India, joining its existing grading lab in Surat.
Events & AwardsSep 22, 2026
NYCJAOS Returns for Autumn EditionThe four-day show is slated for Nov. 19-22 at the Metropolitan Pavilion in New York City’s Chelsea neighborhood.
