[March 2021, Issue 1] From April, You Can't Sell With "Tax-Excluded" Price Display

Hello, this is Tetsuya Ashida of ACIDHOUSE, INC.            

The state of emergency has been lifted in six prefectures in total: the three Kansai prefectures of Osaka, Hyogo, and Kyoto, plus Aichi, Gifu, and Fukuoka.

For Tokyo and the three surrounding prefectures, it continues until March 7, and they seem to be deciding whether to lift it based on the situation, but infections are clearly trending down (there was no correlation between this decline and the self-restraint, but that's another story), and vaccinations have started, so it seems fair to say the exit is just around the corner.

It's March. A year has passed since the forced reset by COVID. It will be ten years since the Great East Japan Earthquake.

This period has seen extremely intense change, and from here on everything will keep changing, like it or not.

Let me repeat once more what I always tell my clients first... in a world of such intense change, it's all the more important to keep your eyes firmly on "what doesn't change".

The news says "companies must go online in the COVID era," and our company says so too.

But it's a big mistake to see "going online" superficially as making it possible to do commerce on the internet.

Here's what "going online" really means:

In other words, the essence is this: start by optimizing how you prompt action and deliver value to people, rationalize management on that basis, and use online tools appropriately as the means.

I often see opinions like "Japanese companies can never do DX (digital transformation); they're sure to fail," but the problem lies in a culture that skips fundamental strategy such as rationality and essence.

You've already changed your prices to "tax-inclusive display," right?

From April 1, 2021, total-price display (tax-inclusive notation) of prices becomes mandatory.

The total-price display obligation itself had been in effect since April 2004, but with the consumption tax increase a special exception was created, making it a "do it or don't, either is fine" kind of thing.

However, from April 1, 2021, unless you clearly show customers the total so they understand "how much do I end up paying?", you'll get in trouble.

For how it should be displayed, please refer to the Ministry of Finance website (On price display from April 1, 2021), but

for a product with a tax-excluded price of 9,800 yen,

That appears to be the rule.

Now, this "total-price display obligation" hurts from a marketing standpoint.

That's because the "just-below-the-threshold effect", a classic price-psychology technique, can no longer be used straightforwardly.

In the examples above, I suppose the relatively usable one is "10,780 yen (tax-excluded price 9,800 yen)".

You'll want to make the "(tax-excluded price 9,800 yen)" part small in banners and the like, but it's not OK if customers can't recognize it (and making it large also affects sales), so it seems you'll need to find the right balance.

If your business hasn't responded to the total-price display obligation, the date is approaching, so please take action right away.

Not only offline but also on digital media such as sites and ads, you absolutely have to "clearly show customers".

Our company will gather information and run verification on pricing that gets a better response even after the "total-price display obligation."

Creative avoidance

In business, you're always dealing with people.

If you want to advance your business more advantageously than anyone, it's an absolute must to know and master the many behavioral traits that all humans automatically act out at an unconscious level.

Each time, I'll pick up one of those behavioral traits and explain it.

The behavioral trait I'm taking up this time is "creative avoidance".

To avoid things you don't want to do, you put your brain's creativity into full gear and produce alibis and plausible excuses.

You hear words like these in self-help-type settings, but the point is that unless you're conscious of it, humans are made to automatically talk only about ways not to do things.

For example, I bought my elderly mother a smartphone, but she barely uses it.

However, consider these fixes:

If you cover these points and weigh them against the benefits of using it, there should be no reason not to use it.

By the way, the most typical forms of creative avoidance are as follows, and many "reasons not to do it" boil down to these...

To read the rest...

This article reproduces part of the newsletter (a rich-text email newsletter sent twice a month, plus two irregular issues) from ACIDHOUSE, INC., the company Tetsuya Ashida runs.