Pricing Hack: Humans need a reference point to think. While selling, either you can provide this reference point or the consumer will find one. Here is how Economist.com made use of this formula.
Earlier Economist.com had 2 subscriptions options:[sociallocker]
$59 for the Web version
$125 for the Print + Web versions
32% bought the print and web version, the rest chose the Web version. Most consumers assumed that the web version is for $59 and the print version id for $66 (125-59). This led to a majority (68%) buying the web version.
Later Economist.com changed the way they displayed the same pricing. They added a new reference point, “Print only” version for the same price as “Print + Web”.
$59 for Web only
$125 for Print only
$125 for Print + Web versions
Now the “Print + Web” price option looked better as people now are thinking that print version is for $125 and they are getting the $59 worth of the web version worth free. Here is the result: Nobody chose “Print only” but The “Print + Web” sales increased by a significant 262%!
This formula is called “Adding an irrelevant option”. Here “Print only” was the irrelevant option that was chosen by nobody, neither the newspaper wanted to sell that option. It was added solely to give consumers a perspective that Print + Web is a better deal than what they think.
Are you going to apply this formula in your pricing? Do you want to learn more about pricing hacks?[/sociallocker]