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You should always have 3 pricing options for your product!
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Let& #39;s start with a simple to understand example
Let& #39;s say you& #39;re buying a cone from an ice cream shop, and there you have the option to get either:
small cone for $4
-or-
Large cone for $10
If you saw this, you would most likely go for the small cone, cause $10 seems too much
Let& #39;s say you& #39;re buying a cone from an ice cream shop, and there you have the option to get either:
small cone for $4
-or-
Large cone for $10
If you saw this, you would most likely go for the small cone, cause $10 seems too much
But now, what if we add a 3rd pricing option, a medium-size cone for $8.
The menu becomes:
Small - $4
Medium - $8
Large - $10
Now all of a sudden the small feels like it won& #39;t be enough, and $10 doesn& #39;t seem that much anymore.
But you& #39;re prob not gonna buy the $8 cause....
The menu becomes:
Small - $4
Medium - $8
Large - $10
Now all of a sudden the small feels like it won& #39;t be enough, and $10 doesn& #39;t seem that much anymore.
But you& #39;re prob not gonna buy the $8 cause....
...If you& #39;re gonna spend $8 compared to $4, might as well add in $2 more and buy the large!
However, in another example, you might not actually buy the medium, It& #39;s all based on how much you charge for it!
However, in another example, you might not actually buy the medium, It& #39;s all based on how much you charge for it!
Let& #39;s say you were selling soap. You sell 2 bottles of soap, one for $10, and another for $60.
Well, the $60 one just seems overpriced, so people would buy the $10 bottle.
However, introduce a 3rd bottle at the price of $25, and the same effect happens again...
Well, the $60 one just seems overpriced, so people would buy the $10 bottle.
However, introduce a 3rd bottle at the price of $25, and the same effect happens again...
...but this time there& #39;s a slight difference. This time the middle product isn& #39;t meant to convenience you to buy the largest, most expensive product.
It& #39;s meant to make the small bottle seem like it& #39;s too cheap, and use the $60 bottle to present itself as the best deal.
It& #39;s meant to make the small bottle seem like it& #39;s too cheap, and use the $60 bottle to present itself as the best deal.
Now ik the examples used here were physical products, but this works for digital products too, and even subscription-based services!
Here& #39;s a paper that tries this out irl and goes more in-depth: http://bear.warrington.ufl.edu/brenner/mar7588/Papers/shafir-reasonbased-cog1993.pdf">https://bear.warrington.ufl.edu/brenner/m...
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