Anchoring is a psychological bias that overemphasizes the first piece of information received.
Here's how its used:
Sellers show prospects a high number and then follow it up with a lower price to increase perceived value.
More value = more sales
11 pricing strategies so effective customers will line up to pay you:
Anchoring is a psychological bias that overemphasizes the first piece of information received.
Here's how its used:
Sellers show prospects a high number and then follow it up with a lower price to increase perceived value.
More value = more sales
It's common to see pricing options that comes in three's.
One of the options is a "decoy" or a fake designed to increase sales of a cheaper plan.
For example:
The presence of the £1680 plan increases the sales of the £560 because its relatively cheaper.
Companies allow partial use of their products in exchange for creating an account.
Typically, top features are restricted or the user cannot have their experience ad free.
Free versions are effective at "warming up" prospects to become paid users.
Divide the monthly or annual prices by the number of days in that period to show the daily price, or smallest number possible.
Also, compare pricing to everyday objects like a cup of coffee to make bigger costs more palatable.
Lower number = less friction.
Prices ending in 9 cause a wire trip in the human brain.
It's been proven that prices ending in 9s lead to ATLEAST an 8% increase in sales.
Consumers will even pay MORE for the same product if the price ends in 9s compared another number.
Price certain items below cost to increase traffic/visibility in order to sell higher margin products.
Grocery stores often price milk (a necessity) below profitability.
Shoppers will see/need other items while in the store increasing their total order value.
Is a strategy to harmonize supply and demand to maximize profit based on inventory or time availability.
Concert venues, airlines, and hotels employ this approach to ensure they sell all their inventory or get max value for highly coveted tickets/rooms.
Set an initial high price and then reduce during a sale or discount.
The goal is to create urgency because this GREAT price won't always be available.
The high-price remains visible to keep the perceived value high persuading to take advantage.
Consumers, especially Millennials and Gen-Z, don't purchase solely on price.
They support companies that share their beliefs and vision for the future.
For example:
Amazon displays certain products as "climate pledge friendly," making price less relevant.
Rather than selling multiple items at different prices it's more effective to combine them into a single offer.
Usually, bundled items complement one another and provide some cost savings.
The convenience and savings of bundled products increases sales.
Is a short-term financing option that allows customers to purchase a product now, but pay in installments.
It reduces the pain of purchasing by lowering the out-of-pocket cost at the time of checkout.
By 2025 BNPL will be a $680B industry!
The best companies like Apple, Amazon, and Wal-Mart use a well-researched game plan to maximize profit.
Check out..
"10 Ideas on how Pricing Strategies can Improve Growth" by Daman Soni for some great breakdowns.
@barrettjoneill
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11 pricing strategies so effective customers will line up to pay you:
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Today's thread is on the affiliate business model. Many years ago, I used to be an affiliate marketer. If there is any way to get schooled in marketing, becoming an affiliate marketer is probably the best way.
What is affiliate marketing and why should you care?
Read on >>
1) Affiliate marketing is selling products or generating leads on behalf of other companies and getting paid a commission for those products.
2) Some notable examples you've seen before:
NerdWallet - you read their articles on best credit cards. You click on a link to one of those cards. You fill out an application. They get paid for delivering that lead to the cc company.
3) In https://t.co/kSfWS69ybp - same thing. Any of their financial products -- you fill out an application, and https://t.co/mCrBT43mOj gets paid for that.
But the affiliate revenue model applies beyond financial services products.
4) Wirecutter -- you see a neat product they review or talk about. You click through and buy.
Wirecutter gets a cut of that transaction.
What is affiliate marketing and why should you care?
Read on >>
1) Affiliate marketing is selling products or generating leads on behalf of other companies and getting paid a commission for those products.
2) Some notable examples you've seen before:
NerdWallet - you read their articles on best credit cards. You click on a link to one of those cards. You fill out an application. They get paid for delivering that lead to the cc company.
3) In https://t.co/kSfWS69ybp - same thing. Any of their financial products -- you fill out an application, and https://t.co/mCrBT43mOj gets paid for that.
But the affiliate revenue model applies beyond financial services products.
4) Wirecutter -- you see a neat product they review or talk about. You click through and buy.
Wirecutter gets a cut of that transaction.
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