Earlier quoted context omitted.
$29 would likely work a whole lot better than $30
$28 would work better than $29... the main point still holds.
you have no evidence for that claim... the '9' effect has been studied extensively
A Guide to Pricing Plans
51–60 of 79 posts
Re: A Guide to Pricing Plans
#52> Yes, Product C is slightly cheaper than the most expensive option, but it offers less storage than any of the options. Why would a business want wrong looking pricing on their pricing page, "decoy"s aside? Seems that would deter people more. Makes the business seem like it doesn't have its stuff together. Would you trust a company that seems like it can't do simple math? I think the author may be getting at somethi…
It would make more sense to have prices $40, $50, $60, where the $50 plan is always on sale for $30. Then, you effectively have a $30 and $60 plan, and the $40 is a decoy to make $30 seem like great value. I designed a quick example below. That being said, I have no experience with pricing strategies, and I feel like this example is missing out on users and businesses that would be willing to spend $100. https://i.im…
The article also suggests you should start with the post expensive option (60 in your case)
Re: A Guide to Pricing Plans
#53Earlier quoted context omitted.
Or maybe adding the 500 option is the way to communicate your features most effectively. i.e. it presents the top-end of what's possible and accurately showcases where your more expensive option is.
> maybe adding the 500 option is the way to communicate your features most effectively. Not if nobody actually buys it, which was a premise of that particular example.
Especially then. It allows you to proportionally weight the price against what's available.
All of this is just effective communication.
In fact, considering that all we have available is the end result of the operation, I think the "effective communication" hypothesis is much stronger supported than the "tricking" hypothesis.
Re: A Guide to Pricing Plans
#54Having a price crossed out to give the impression of a sale is just straight up lying. It's illegal here in Norway at least. The product must have been sold a certain number of times for the crossed out price in order for it to be legally presented as a "before" price.
https://www.forbrukertilsynet.no/lov-og-rett/veiledninger-og...
Re: A Guide to Pricing Plans
#55Re: A Guide to Pricing Plans
#56Earlier quoted context omitted.
$28 would work better than $29... the main point still holds.
you have no evidence for that claim... the '9' effect has been studied extensively
I think you missed my point. Whether it was 30 or 29, the idea still holds, and the idea was not optimizing to the single dollar level.
Re: A Guide to Pricing Plans
#57Having a price crossed out to give the impression of a sale is just straight up lying. It's illegal here in Norway at least. The product must have been sold a certain number of times for the crossed out price in order for it to be legally presented as a "before" price. https://www.forbrukertilsynet.no/lov-og-rett/veiledninger-og...
All the mind manipulation traps presented in the article are deceptive and fraudulent. They all should be made illegal if they are not already.
Re: A Guide to Pricing Plans
#58Earlier quoted context omitted.
Why would you design a price for "value provided"? That's highly subjective to the user. Users also generally only pay for what they expect to pay, not the value they're getting. For instance, some utility might save hundreds of hours and thousands of dollars over the course of its usage, which is tremendous value . Yet if the average user expects that it should cost no more than, say, twenty dollars, that's what the…
> some utility might save hundreds of hours and thousands of dollars over the course of its usage Yes, "might": > you can't know the value users will actually get out of your product So the problem you have is that you think (but don't know) that your product is much more valuable to your users than they think it is (since they're only willing to pay $20 for it). You're not going to fix that problem by hacking how yo…
> So the problem you have is that you think (but don't know) that your product is much more valuable to your users than they think it is (since they're only willing to pay $20 for it).
No, the problem is that whatever you think your product is worth is irrelevant. What matters is your costs, that puts the bottom on the price, unless you want to burn cash for growth. Your customers expectations are the ceiling.
Of course all your customers are not alike and maybe there's 10% that would pay so much more to outperform the other 90% in revenue. That's when upselling comes into play, or maybe you want to focus only on the 10% entirely.
> If your program is actually worth thousands of dollars to the user, but they're only willing to pay $20 given their current knowledge, you don't want to tilt their expectations by "a little bit". You want to tilt their expectations by a couple of orders of magnitude. Which, as noted above, is not doable by hacking how your pricing is presented on a web page.
It's not doable at all. Nobody who expects to pay $20 for something will shell out $200 for it, unless they have looked everywhere and figured that everyone else charges in the same ballpark, or that you are the only option and they really need your product.
Anchoring isn't magic, it's the same kind of trick that makes $9.99 appear substantially cheaper than $10.00. It'll give you a slight boost.
Re: A Guide to Pricing Plans
#59Earlier quoted context omitted.
Why would you design a price for "value provided"? That's highly subjective to the user. Users also generally only pay for what they expect to pay, not the value they're getting. For instance, some utility might save hundreds of hours and thousands of dollars over the course of its usage, which is tremendous value . Yet if the average user expects that it should cost no more than, say, twenty dollars, that's what the…
In my view, if you're charging $20 for a utility that demonstrably saves companies hundreds of hours of labor, then you're leaving a whole lot of money on the table.
The $20 figure may be more appropriate to the average consumer, but the same principle applies to companies. However, then it gets way more complicated because more people are involved in the purchasing decision and the users aren't necessarily the ones deciding the purchase. Getting a small purchase through is exponentially easier.
Most companies aren't actually all that efficient, they are very good at creating busywork. Lots of human factors are at play. Changing workflows is a tough sell.
Also, what's a "demonstrable" saving? Sure, I can sing the praises of my product, of course I will. I can bring testimonials. The person at the other side will not take it at face value.
They have a budget, they have an expectation of how much to spend. They can't just add my promised savings to their budget. Nobody is getting fired for wasting money on the purpose it was already budgeted for.