Psychology is a major aspect of contemporary marketing.
Take the blue light effect, for example. Researchers have found that blue light exposure increased appetite and altered a person’s metabolism.
Now, suppose you own a restaurant or even a convenience store that sells food. What kind of lighting are you going to choose in your store or restaurant? Blue lighting.
Or, take the “foot-in-the-door effect.” It’s simple. Get someone to commit to something small. Like a newsletter. Or a free-trial. Or even a small donation.
They’ll be more willing to make the bigger purchases when requested later on if they acquiesce to the smaller request first. This was proven true in the 60’s by a couple of professors in California.
Techniques like these are prevalent in marketing today. They might seem dishonest, but they are really just examples of human behavior.
Now, how do we apply psychology to online marketing? Let’s look at how you can build a pricing page through psychology that actually converts.
1. Consistent Pricing On Your Pricing Page
Have you ever heard of “Base Rate Fallacy?
It’s the idea that we tend to use only the information presented to us at the time of a decision.
This probably harkens back to our days on the plains, fighting for our survival. When a lion comes upon you in the middle of the woods, you don’t think about the likelihood he is just meandering through the woods mid-morning. You immediate see “lion” and react. You have to make quick and efficient decisions to survive.
The same is true for marketing.
Suppose you have a product that typically costs $2 elsewhere. But, you have a few upgrades to the product. You want to sell it for more than two dollars.
On your pricing page, you put $4 for the “Basic package.” $6 for the “Amateur package.” $8 for the “Pro package.”
Now, you know all three are basically the same as the $2 product elsewhere. You might have tweaked each product a little. But on your pricing page, you control the range. As long as it’s a logical and consistent pricing, people will see the logic. They will then forget the going rate of $2 because their highly evolved hunter-gatherer brains need to make a quick and efficient decision.
By being consistent and logical about your pricing, you have told them that all the information they ever need is right here. Make a choice!
2. The Framing Effect On Your Pricing Page
It’s all in how you explain it. Really. How are you framing your product on your pricing page? Is it in a positive or a negative light?
Here’s a thing about statistics. The base numbers don’t matter to most people. It’s how the researcher presents the information that makes the conclusion. Is this honest? Well, if you are somewhere on either end of the autistic spectrum, you might find it completely honest. Because you’ll pick out the underlying facts without even trying.
But most people respond positively to positively framed statistics, even if the facts themselves are absolutely negative in scope.
What does this mean? People are cognitively lazy. They don’t think truly logically. (Sorry, Spock wannabe’s, you’re still fully human.)
Let’s look at a few examples from the cognitive improvement site HighIQpro and see if they ring true to you.
- “We are more likely to enjoy meat labeled 75% lean meat as opposed to 25% fat.” Do you see where the positive is in this statement? Both the same underlying reality, two different outcomes.
- “More people will support an economic policy if the employment rate is emphasized than when the associated unemployment rates are highlighted.” If you’re a politician, take heed. You could get your bill passed with the framing effect.
- “93% of PhD students registered early when the framing was in terms of a penalty fee for late registration, with only 67% registering early when the framing was in terms of a discount for earlier registration.” In this case, the negative was the motivator.
How do you apply this to your pricing page?
Simple. Show the “value,” (remember the above base rate fallacy, you set the value) and then “slash” the price. Lastly, tell the customer what they save.
So, example: If you say you have three products that scale in value. Set the first option a little high. Say, $80 for a thirty-day subscription. That’s $2.66/day. Then you set your next price at $200 for a 90-day subscription. That’s $2.22 per day. And then you set your third option at $390 for an 180-day subscription. That’s $2.17 per day.
Now, your customer is paying $120 dollars more for the second option. But over time they save $40. You’ve only slashed the price by $.22 per day, but you can frame that on your pricing page with a simple savings statement: “You save $40!” Or, you could even just put the price per day of the last two.
Option A costs $80. Option B Costs $240 $200 ($2.22/day) — see the double positive framing there?
And psychology backs up the thinking on your pricing page!
3. Use The Decoy Effect On Your Pricing Page
Next time you go to the movie theater, observe carefully. How many options are there for popcorn? Three, right? What is the price difference between the small, medium, and large?
Does anything seem remiss? No? Take away the medium popcorn. Now the price jump between small and medium is probably considerable. What do you think people will buy now? Will they buy the “ridiculously” priced large?
Ok, put the medium popcorn back on there. What’s the price difference between a medium and a large? Probably only $0.25 to $0.50. What do you think people will buy now? Unless they jump immediately to the small, they are most likely going to buy the large. It’s only $0.50 more, right?
Why is this? It’s called the decoy effect, and a psychologist from Duke University proved this effect is real in one of his studies. His word for the effect was asymmetric dominance effect.
So, how does this apply to your pricing page? Simple. Add an option just below your highest price. It should fit logically within the chain of prices and only be a little bit less than your highest priced package.
Your pricing page will convert like magic if you try this bit of psychology.
4. The Middle Child Is Very Important
Of course, we’re not actually talking about children here. But sometimes our products feel like children. We’re actually talking about the middle option on your pricing page. It’s highly important in conversion.
Why is this? It’s called the “Center Stage Effect“. People tend to choose the item in the middle of a lineup. This is true no matter how you arrange the item, whether vertically or horizontally. People still tend to pick from the middle.
You can use this to your advantage. Your pricing page will probably have a list of products. Typically this is presented horizontally.
Which product is your best product? The one you think your customers will latch onto and make them want to come back for more? Choose that product and make it the central choice on the pricing page.
It’s really that simple. This will help with your conversions too.
5. Getting On The Bandwagon With Your Pricing Page
Did your mother ever ask you the very “mom” question, “If your friends jumped off a bridge, would you jump too?”
But, that’s the thing. Your mom was right. Humans like to play “follow the leader.” If someone else buys the grass and algae mix drink and loved it, you’re probably going to get the grass and algae mixed drink too. Nevermind the fact they don’t have any taste buds to speak of.
This is called the bandwagon effect. Or the “I’ll have what he’s having” effect. In psychology, it’s called “groupthink.” And it’s a very powerful compulsion in the human brain.
We like to be followers. It’s how fashion trends happen. It’s how “going viral” happens. You trust the group’s opinion more than your own free-will.
It plugs into our curiosity too. A lot of times you might find yourself wondering, why is this one so popular and you listen to the latest song or watch the latest movie everybody is raving about.
This is exactly how groupthink works, and it’s a great psychological tool for you as a marketer. Remember, you set the rules on your pricing page. You decide what’s “most popular.” Highlight for your customers what you think will be the most popular.
Then, watch the conversions roll in.
Conclusion: The Mind Is Your Friend
Studying human behavior is the best thing you can do as an online marketer. You want people buying stuff from your pricing page. Use psychology to your advantage.
If you know of more aspects of psychology that will bring pricing page conversion, let us know in the comments below. And as alway, keep converting those clicks!