Have you seen the film Rocky? In one fight, Rocky is hit so hard, he ends up seeing his opponent in triple vision. “I see three of him!” slurs the punch-drunk Italian Stallion.
His trainer’s advice? “Hit the one in the middle”.
That’s what you should do when displaying the price of your products or services.
Go for the middle, with back-up options on either side.
Have you noticed at the end of any race, the winner stands on the middle podium?
Or how in the Apprentice, Lord Sugar takes his place in the middle seat?
And when a band performs live, the singer usually stands in the middle?
Now, imagine you’re pitching to a panel of 3. The one in the middle will automatically seem to be the most senior in rank, at least initially.
In visual situations, we’re conditioned to think the middle is the most important, or the most “authoritative”.
Good things come in 3
Let’s say you’re selling web hosting.
To make a profit on a customer, you need them to sign up to a service that costs £50 a month. You offer all the extras like setup, support and configuration, but £50 is the magic number.
Giving one option only is a high-risk game. You’re saying: “Take it or leave it.”
The problem is, some people will always leave it.
Give lots of options, and it becomes hard to choose. You risk what’s called analysis paralysis. People freeze and walk away rather than take action.
Offering 3 options is a sign of compromise. It shows you’re open to negotiation. Your target market feel more in control because you’re offering a menu, rather than an all-or-nothing deal.
And you’re also, in a subtle way, advertising that you cater for different types of customer.
So you’ve got 3 to display, and you’ve placed the £50 option is in the middle…
…what about the other 2?
Drop the anchor
You use them as anchors.
People need an anchor to help them judge what’s good or bad. They can then compare and decide what’s good value.
Because “we don’t have an internal value meter that tells us how much things are worth”, we “focus on the relative advantage of one thing over the other, and estimate value accordingly”, explains Dan Ariely in his brilliant book, Predictably Irrational.
If you don’t know this book, It’s full of case studies showing how we make decisions based on what we think and feel, rather than solid logic…
…including how we anchor things, especially prices.
He gives the example of the Economist magazine, which offered three subscription types:
- Web-only subscription: $59
- Web and print subscription: $125
- Print-only subscription: $125
How could 2 and 3 be the same price?
“I am pretty certain they wanted me to skip the web-only option…. and jump to the more expensive option of web and print”.
How could Dan know this?
The Economist’s marketers, he reasoned, knew about anchoring.
Option 2 offers free access to the web version when compared to option 3. Free access? That must be a bargain, right? Who doesn’t want a freebie!
So on one side of your £50 option, put your anchor.
People will use that to compare the other options.
OK, expensive anchor on one side… what next?
On the other, show a deal that is obviously not good value compared to your middle option.
Consider making it only slightly cheaper, and with far fewer extras.
This is your “decoy”.
How do you make it even more obvious?
Add clues to your copy.
Below, 123-reg have labelled the middle option “Most popular”
Let’s say you’re targeting startups.
Label the £50 option “Popular with startups”, or something similar.
They’ll think “Perfect for startups? We’re a startup! Let’s go for that.”
The other two options can be labelled something that wouldn’t appeal to startups.
Something like “for beginners” and “de luxe”.
Solving the mystery for your audience
At this stage you might be thinking: “Decoys? Clues? Anchors? This all sounds a bit Sherlock Holmes to me…”
You need to do this for your audience…
…because you’re helping them make the right choice.
Have a look at some websites offering subscription models. You’ll find many use anchoring.
See how the Daily Telegraph does it:
The Daily Telegraph run a paywall, so most readers will need one of these
The Daily Telegraph’s average readership age is on the mature side. Around 61 years old, according to this report. That’s probably about right – the ads section is full of offers for stairlifts, walk-in showers and arthritis cures.
So a large chunk of the readers will want the print edition. They can pay £11… or for just £1 more, get the digital version as well. At 61, plenty of people are online, so they’re likely to think “Well, it’s just an extra £1, might as well for for that.” That makes the £11 option the anchor.
With “free 30-day trial” offers, and a line pointing out which is for teams v individuals, guess which options Hootsuite want you to try:
One more thing…
I’m not saying 3 is always the model to choose.
You always need to test things like this… but 3 is the best place to start.
You can then start experimenting with different calls to actions, different features, in different orders.