How To Use Decoy Pricing
It’s possible to influence your target audience in such a way that their perception of ‘the right decision’ can be altered.
A classic example of this is the use of ‘decoy pricing’.
Several years ago a Professor in Psychology and Behavioural Economy, Dan Ariely, studied subscription options offered by The Economist.
OptionA – Print+Digital for $125
Option B – Digital Only for $59
Prof Ariely asked 100 of his students to choose their preferred subscription, and the results were as follows:
Total ‘revenue’ = $8,012
Prof Ariely then introduced a 'dummy option' - Option a – Print Only for $125
So the student options were now:
Option a – Print Only for $125
Option A – Print+Digital for $125
Option B – Digital Only for $59
The choice made by his students was nothing short of astounding…
Option a- Print Only 0 students @ $125 = 0
Option A – Print+Digital 84 students @$125 = $10,500
Option B – Digital only 16 students @ $59 = $944
Total ‘revenue’ = $11,444
This represents an uplift of $3,432 (42%) in total revenue!!
HOW TO USE
Add a decoy pricing option next to your preferred pricing option.
As an example let’s say you have two product options:
Option A is a video course on Facebook advertising
Option B is a video course on Facebook advertising plus a ‘toolkit’ of workbook, ebook, audiobook,
and sample ads.
Option A costs $67
Option B costs $97
You want your target audience to choose Option B.
At the moment your target audience has a choice to make that is not really influenced by you. They may choose Option B if they feel that the ‘toolkit’ would be useful, or they may just go for Option B as it is a lower price.
Now, introduce a ‘Decoy’ option, let’s call it ‘Option b’ into the mix and you can swing the probabilities in your direction.
Option A: video course on Facebook advertising – $67
Option b: video course on Facebook advertising plus workbook – $91
Option B: video course on Facebook advertising plus a ‘toolkit’ of workbook, ebook, audiobook and sample ads – $97
By introducing a third option that is very close in price to your preferred option, but far inferior in terms of value, you trigger a reaction in your target that pushes them to take the best value option, Option B in this case.
This post originally published on my blog https://andywood.com/how-to-use-decoy-pricing/
Hello @towerone.
Much of your content was previously published by other authors.
https://medium.com/evil-marketers-club/decoy-pricing-70051dc1d0e9
https://andywood.com/how-to-use-decoy-pricing/
Project Hope does not support Plagiarism
Thanks for this, but I am actually Andy Wood and those are my posts. I have full rights to the content as I wrote it. I have taken the website down as I prefer to write here in this community.
Nice to meet you, appreciated Andy Wood.
Please, could you put a link to the original publication of the article in your next post, please?
I have no way to verify your identity. I'll just take your word for it, it'll be enough for me.
It intrigues me to know, why a writer as good as you, with your own blog, you are just opening an account on steemit so recently?
Thanks for that Juan.
Honest answer ..
I have been into digital marketing for some years, and perhaps the biggest myth of all is that ‘passive income’ actually exists. It doesn’t. Unless you have millions to pump into FB ads, even pretty successful marketers need to work on their brand just about every day in order to grow and maintain a meaningful audience. Whilst I have been successful at this, it can be pretty demanding on time.
I recently got into crypto trading, and it should come with a health warning, because it is very addictive. I decided to put my effort into crypto for a year or so just to see what happens, so decided to shut down or slow down my other online activities: andywood.com, digitalagencytoolkit.com and my Evil Marketers Group on FB, so that I can immerse myself into crypto trading.
I stumbled across Steemit.com and thought it would be interesting to see what appetite there is for the kind of posts I used to put on my blog. It’s a kind of half-way house between my old marketing life and my new crypto life. As I gather more crypto experience I guess I will add more crypto-related posts. I started cryptomarketexaminer.com as a home for my trading ‘adventures’ but as I am at the very early stages, this site is mainly market stats based stuff.
Anyway, having had you pull me up on my handful of posts, I have now restored my andywood.com blog and will add the links to the original posts as requested.
Hope this helps
Cheers
... and on my blog I have added a menu link to my Steemit posts, just to prove that it really is me!
You are extremely kind Andy.
When you have the opportunity, you could Powerup your account.
I recommend you want to take advantage of the current low prices of the Steem. Maybe you can buy some Steem and increase your SP.
They are just little tips.
On the other hand, don't stop posting (comments included). It is the only way to increase your reputation.
Dear @towerone
Perhaps one would need to define what "passive income" means. I used to run small online business and I moved away from it, allowing someone else to take over.
However I kept few % from income as my monthly paycheck and I've been enjoying decent regular payout. without investing minute of my time for past few years.
Would that be considered passive income by you?
Wait for another bull run. You will witness explosion of emotions of masses, like you've never seen on any markets out there. I've witnessed 2017 bull run and I had impression that people are blinded by greed.
Impressive work so far. Are you a programmer ? (just curious)
Great to have you on-board of our community :)
Yours, Piotr
Hi @crypto.piotr good to 'meet' you.
Passive income in this context means the promise that someone can create and launch an online product, and then sit back and watch the cash roll in. There are so many people peddling 'training' of this type, but what they omit to mention is that to be truly successful in information marketing, one needs qualified traffic. And the generation of qualified traffic takes a great deal of effort.
Most newbie entrepreneurs try to tap into cold traffic, that is persuading people who know nothing about them to buy from them = fail (I am talking about building a business here, not just grabbing a handful of dollars here and there).
Warm traffic, people who know about you, perhaps follow you, may buy from you = better chance of success.
Hot traffic, people who have already made a purchase from you in the past = good chance of success.
To get to warm traffic you need to build a following, a positive reputation, and doing this takes work. One needs to be present where your target audience are, consistent with your messages, and to post and interact very regularly. It is not possible to do this by dropping in every now and then, and then disappearing for a few weeks, then appearing again. Post useful and/or interesting content nearly every day.
I’m not a programmer at all, but I am a lifelong learner. I like to think of myself as a mature student!
Great to be here.
Love to see how responsive you are @towerone :) cheers
What about: https://medium.com/evil-marketers-club/decoy-pricing-70051dc1d0e9
Thats me again. I started a series for my EvilMarketers group on Facebook. I have since deleted that medium account.
Thanks for letting me know.