In this episode I talk about how to use the price of your product or service to make it feel like an absolute no brainer purchase.

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Big Ideas

Why Contrast Is Key [1:33]

I was in the grocery store and I saw that blueberries were $2 off so I scooped up four of the little packages because it was a steal of a deal. But what if you went to buy a car, and the car salesperson told you they’re going to give you $2 off of the car? You’d save the same $2, but you’d feel totally different about them because of contrast. It’s not the amount of a discount that matters, what matters is the contrast. $2 off a pint of blueberries is a significant amount of money in contrast to what you’d be paying for the whole thing. $2 off a car is not a lot of money because it’s in contrast to the overall bigger price.

I first learned about this when I read the book Predictably Irrational by Dan Ariely. It showed a particular pricing structure of the Economist Magazine. They had two options – a one-year subscription to the online articles for $59, or the print subscription for $125. Most people selected the online version because they’re comparing the $59 to the $125, and the $59 feels like a steal of a deal. Later, the Economist introduced the third option, where you can get both print and online versions for $125. Given those three options, most people were selecting either the print and web option or the online option. Because now they were comparing the print version versus the print and online version together for the same price. Contrast is the number one way to make your price feel like a no brainer. So how do you create contrast in your pricing?

Price Above [7:02]

Always have a higher-priced option because it makes your price seem low. When we launched our TRIBE course way back in 2016, we had an option on the sales page for people to book an in-person workshop for $10,000 which was five times the price of the actual course experience. Both are attractive offers but most people were not going to book the $10,000 option. The higher price of $10,000 created that contrast and made the course seem so much more of a no brainer.

Price Below [8:54]

Number two is to have a price below your option. We’ve just recently done this with our Searchie offer. When you have a price below your ideal option, you still want to price them fairly close. An example would be like $67 and $97, $77 or $87 and $97. And then you stack the features of the option that you really want to sell, so that the lower-priced option is fairly close in price but it has a fraction of the features available. The price point that you really want to sell is just slightly above but it has so many more things in the offer that the lower-priced option does not. It’s automatically going to feel like a no brainer to buy yours at a slightly higher price because it has more value.

Future Value [10:41]

Number three is to contrast the future value so that it feels like a deal not only today but in years to come. One of the strategies we talk about at TRIBE is that when you’re launching a membership for the very first time, you want to make a founding member offer. Part of that founding member offer is that they can join at the lowest price the membership will ever be. And they will be grandfathered in at that price for as long as they remain a member in good standing. That’s how the value starts to compound. The more they see that future value, the more they realize this is an absolute deal today, and the deal gets more and more valuable as time goes on. Contrast the ripple effect of what you have to offer because this is where it begins to really feel like a no brainer.

Memorable Quote

“It’s not the amount of a discount that matters. What matters is the contrast.” – Stu McLaren

Resources

Predictably Irrational: The Hidden Forces That Shape Our Decisions
Searchie
Episode 45 – A Simple Copy Tweak For Better Results

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