How to prevent people from choosing low prices on a website
The subject of prices came up during a talk I gave the other day when I was asked how price tables should be presented on a web page. The questioner wanted to know how they could display pricing options on a web page to attract the most customers. Then the discussion turned to the possibility that if you give people options, they will go for the lowest price.
Without a doubt, it has several products and services at different prices. For example, if you’re in the consulting business, you might have a one-time, low-cost phone call that provides basic assistance, up to in-depth research and strategic planning at a much higher price. Similarly, if you are selling to consumers, you will have multiple price points for different products or services; A typical shoe store, for example, will have shoes at low, medium, and high prices. The problem is that by having multiple prices, we allow people to choose low-priced items.
However, constant research shows that price is not one of the main criteria when it comes to choosing exactly what people will buy. Sure, it is a factor, but it is comparatively unimportant. However, price becomes an important factor in product choice when the company focuses the customer’s mind on price. Thus, for example, supermarkets compete on price, forever reminding us of the “fact” that they sell the lowest priced items. When people go to your stores, they shop with price in mind, looking to save a penny here and save a penny there. It all adds to the reduction in the profitability of supermarkets. If they stopped reminding us of prices, we wouldn’t focus so much on them …!
On the other end of the spectrum, go to a high class jewelry store and try to count the price tags …! You will be there for a long time playing “find the price”. They don’t tell you the price because they are focusing their attention on the quality and emotional aspects of what they sell.
However, at some point you have to tell people the price. So how can you do that without putting them off or demanding that they see something that is priced much lower?
Psychological studies show that you can influence people to buy things at a higher price by displaying prices in a way that people want to get the higher-priced items. The first step in this is to give people a pricing option. You see this a lot on the internet. You will see a table with three options and the prices of each option, as well as what you get with each price point. You can also see this pricing option in supermarkets: a can of beans at 30p, a “special offer” of two cans of beans at 59p, or a four-pack of beans at £ 1.10. Many people who really only want or need a can of beans end up buying the four-pack “because it’s cheaper.” Except of course it’s not, it’s almost four times what they actually need to pay …!
What you need is to show the prices so that people think they can choose the amount of money to part with. But those prices need to infer a higher value from the higher prices. However, as I point out in my Click.ology book, it should really show your prices backwards the way most websites do. Most online pricing tables have the item with the lowest price on the left, the average price in the middle, and the highest price on the right. More effective is having the highest price on the left and the lowest price on the right. Studies show that we perceive things on the left to be smaller than similar things on the right. Therefore, the high price does not appear to be that high if it is placed to the left.
Another set of studies shows that if you give people a choice between three things, they tend to choose the middle one. If you were a courier, for example, and gave people the option of delivery within an hour, within 12 hours, or within 24 hours, most people would choose the 12 hour interval. If your price is £ 10, £ 20 and £ 30, that means most people end up paying £ 20. All you have to do is change the prices. Changing them to £ 20, £ 30 and £ 40 now means that most people end up paying £ 30 because they choose the intermediate option.
So how can you prevent people from choosing low prices? Easy. Give them a pricing option and raise your prices. They will go for the middle price, assuming you place the highest price first in the options line.