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The Pricing Psychology You MUST Know Before You Run A Promotion
It’s almost summertime! Warm weather means more shooting, and to fill up that calendar you’ll probably be marketing and creating promotional offers.
Let me give you three small pricing tweaks that will pull in more clients without sacrificing your profit margin.
1) The truth about the number 9: It sells even better than LESS EXPENSIVE options.
You already know that $99 feels better than $100.
But did you know that $99 also feels better than $94?
Researchers looked at how well an article of women’s clothing sold at three price points: $34, $39, and $44. The clothing sold best at $39, even better than the $34 option. Nines are pretty convincing, apparently. So your promotions will probably sell the most at $499 rather than $486, for example, even if you think it’d be “nice” to kick back a few extra dollars.
In their experiment, the only thing that sold better than a price that ended in 9 was having a sale price that emphasized the original price point. For example a price tag that said:
sold better than simply displaying:
However, by far the most convincing option was:
So, there’s not much of an excuse for not ending your prices in 9, particularly during promotion time.
Important Note: I’m not suggesting that discounting your services is the best way to promote them; I share this research just to illustrate the power of 9. For promotional ideas that don’t involve discounting, see this post. Also, keep reading here!
2) Want people to buy your top package? Try “Useless Pricing.”
Let’s step away from photography for a moment. Say you’re looking to subscribe to a magazine. You click to the subscription page, and see the following choices – which would you pick?
1. A web-only subscription for $59
2. A print-only subscription for $125
3. A print + web subscription for $125.
Dan Ariely found that 16% chose the web-only option, and 84% chose the web + print option. Obviously, no one bought the print only option, because it’s “useless” – who would want print only when you could have both print and web for the same price?
So if the middle option is useless, then why have it at all?
Because Ariely tried taking out the “useless” option, and something interesting happened.
When he took out the “useless” option:
The $59 option went from 16% sales –> 68% sales.
The $125 option went from 84% sales –> 32% sales.
The popularity of each package flip-flopped. If you sold 100 subscriptions, taking out that middle option would have meant losing $3,432 on that promotion. Purely by deleting a single line.
So let’s say you’re doing mini sessions, and you were thinking about having a prints package and a digital files package. But instead of just having two options, why not try having three?
1) Five gift prints – $299
2) Five digital files – $599
3) Five gift prints + Five digital files – $599
(You can fill in your own prices…this is just for illustration.)
It might feel ridiculous, but field research suggests you’d see a substantial increase in people buying your top package.
“Useless pricing” works because it encourages people to focus on value rather than “discounts.”
When there are two options, people will try to talk themselves into buying the less expensive one. They will find reasons why they don’t need the more expensive one, they’ll devalue it in their minds because they’re overly-focused on price (source).
Adding a “useless option” makes the top package look like a no-brainer great value, and makes the smaller package appear far less valuable. It changes people’s focus to the content, not the price. This is great, because:
3) People prefer increased value for the same price, rather than a discount.
You know those lotion bottles at the store that say “33% more free”? That’s because it sells better than if they gave you a 33% discount on the existing bottle. Even though a 33% discount is a far better deal because it makes the price-per-unit less expensive than getting 33% “more free,” people still like the idea of getting extra value for the same price.
Tying this back to #2, having the top package be the same price (or a negligible difference) as the “useless” point makes it look like they get “more free.” This is better than if you framed it as a discount.
Take-home points about promotions:
Be sure to end a price in 9, particularly during a promotion.
When given a choice, people usually select added value over decreased price, even if decreased price would have been a better deal.
Additionally, for some promotions, consider offering a “useless” middle package to help clients focus on value instead of price. You’ll likely see a dramatic increase in selling the top package.
Speaking of promotions, 😉
If you liked this post you might check out my popular e-course Irresistible Words. You know how to price a promotion now – but do you know how to write one?
Irresistible Words walks you through the process of persuasion so you can repeat it yourself, teaches you to write blog posts flash-fast, and puts an end to the head-banging of “I don’t know what to say.”
Check it out here.