THE $60 SHIRT DIDN’T BECOME MORE VALUABLE. THE $100 PRICE TAG DID.
In 2012, JCPenney tried something that looked almost impossible to argue against.
No fake sales.
No endless coupons.
No “40% OFF” signs.
Just straightforward prices.
Customers hated it.
The company lost $985 million within a year, and CEO Ron Johnson was fired. Soon after, JCPenney brought discounts back and list prices on many products rose by 60% or more.
The strange part is that the underlying products hadn’t suddenly become worse.
The reference point had changed.
Behavioral economists call this relativity. When we can’t judge the absolute value of something, we compare it with an easier number.
$60 feels different when it is:
$60.
Or:
$100 → $60
Same product. Same $60.
Different decision.
That’s one of the most useful things to understand about selling.
You aren’t only selling the product. You’re shaping the comparison people use to decide what it’s worth.