8 psychological methods of price list design optimisation
The pricing page is one of the most important features of your business. The correct design of pricing page is the key to increasing leads, sales and profit numbers. However, its not about price list design per se.
Emotions and psychology have a huge impact on purchasing behaviour: users expect your products and services to meet their emotional needs.
In this article we will consider how the features of the human psyche are manifested in the purchasing behaviour, as well as ta number of psychological techniques that can increase the effectiveness of your pricing page.
(a) The effect of the bait
The decoy effect, also known as asymmetric dominance effect, is based on the fact that by making a choice between two options user makes a decision not in favour of seller. So in order to simplify the process a third option is introduced, obviously unprofitable option, rejecting which, the user makes the decision in favour of one of the other two options.
As an already classical example of this maneuver, we will take the popular page of the subscription to The Economist magazine.
Here the user can choose from 3 options:
- $59 for the online version.
- $125 for print version
- $125 for print & web subscription
Obviously, the second option here plays a bad cop role. Moreover, if only the first and third were presented, the user most likely would prefer online subscription (coz its cheaper). However, on the background of the offer to pay $125 for one printed version of the magazine, the same amount immediately for both versions seems to most of the most profitable solution even compared to the cheapest option.
(a) Anchor Effect
The effect of the anchor is that when assessing the numerical values, a person subconsciously starts from previously presented numbers. In particular, this effect is used by stores when an old (not always truly so) prices next to the new ones, thus creating the illusion of a profitable offer.
An example from Pawel Kadysz
(c) Analytical paralysis
Although the wide options range allows user to choose the optimal solution to suit his or her preferences, be careful: excessive selection can cause a stupor state. This phenomenon is called the term “analysis paralysis” and describes the state when, as a result of excessive analysis, a person loses the motivation to make decisions or to make any action action at all. With regard to price lists, too much choice can cause the user to have such a condition, and he will simply leave the page.
(d) Illusion of deficit
A limited supply leads to an increased demand, and therefore to a higher price. For example, global diamond production is controlled by a small group of companies, resulting in the value of diamonds is consistently high. In order to use this effect on your price list, you have to create a feeling of limited supply for your customers.
Promotions limited in time or quantity of goods, as well as offers available “by invitation only” are a great way to create the illusion of deficit.
The website of the booking system Expedia.com actively uses this tactic. In the hotel searching, the user can see: Number of users currently browsing the hotel page.
All this creates the impression of demand for rooms and encourages the user to book more quickly before the opportunity is missed.
(e) Fear of loss
Our efforts to get out of loss or hurt are much stronger than the will to profit or experience a pleasure of some sort. Some studies show that the loss has twice as much psychological impact than comparable benefits.
That is, if a person loses $100, the grief associated with it will be much stronger than the joy that he will experience when he finds the same $100. There are a few way to use this property of a human mind.
For example, free trial: The effectiveness of this tactic is linked to man’s inherent desire to avoid loss. By starting to use the product, after a while the person depends on it but usage is limited (either by time or features) – the next logical step is to purchase the product so as not to lose the opportunity to continue using it.
(f) Hyperbolic depreciation
The term “hyperbolic depreciation” describes the subjective perception of remuneration depending on its distance in time. To be more specific: having a choice, we will choose what we get earlier even if its value is less than the delayed option.
In other words, people prefer immediate rewards to discounts and bonuses that one have to wait for.
(g) Error of correct selection
The term “choice supports bias” refers to our tendency to perceive choices already made in the past as better or wiser ones. That’s exactly the basis for the reviews of other people on the pricing page is a great way to increase conversion: demonstrating that people have already decided to take advantage of your offer and are finally satisfied, prompts the user to buy.
For example, on the subject, the reviews are placed on the right. First, reviews inspire confidence, and secondly – more importantly – show that customers are extremely satisfied with the decision taken and register on the service.
In the end, it’s all about trust. Customers must be sure that they can rely on you before they give you a dime. There are several ways to gain the trust of visitors:
e.g. Mention the number of people who have already trusted you.
Campfirenow.com marketers applied two of these three techniques, mentioning “more than 100,000 customers” and placing under the price list a review from lifehacker.com
Understanding the universal properties of psyche will allow you to establish closer contact with your target audience and encourage users to make a decision in your favour.