Price is one of the key elements of the product sheet in an e-commerce or print catalog, but it can also be very important in an advertisement, landing page or affiliate link on a blog.
Your product may be the best on the market, but sooner or later you have to show the price, and you have to do it effectively. The customer wants to know how much the lobster costs before buying and eating it. The price label can increase the conversion rate when the user is in the final stage of the purchase funnel or can be instrumental in the earlier stage when they have to choose among a number of solutions.
There are some psychological techniques that play on the user’s cognitive biases to create an irresistible price tag and turn your product into a real bargain.
What is the right position of the price label
Obviously, the price must be present in an e-commerce and should be clearly visible, graphically separate from the rest of the content, and clear. In an advertisement or blog article with affiliate marketing links, we need to show it if this can be a determining factor or if the user is at a point in the purchase funnel very close to conversion. It is not trivial, in fact in many cases the price label is not positioned well, the reader takes a second too long to find it and does not complete the purchase.
Should you show the price or the product first? It depends on whether the value of the product is more important for the purchase (for example, an indispensable, unobtainable item or simply very similar to the user’s values and desires), or the price (for example in the case of an offer, sales or Black Friday).
Research conducted by Harvard and Stanford scientists analyzed nerve reactions in the cerebral cortex during the buying phase. The results show that when the product was shown first, the choice was driven by quality; when the price was shown first, the choice was driven by cost.
So price should be put when the user is very close to conversion or when it is an important factor in choice. Where it should be put depends on the sales strategy we want to undertake.
Precision pays off, go beyond the decimal point
On sale for only €9.99. How many times have you seen this formula in advertisements? 9.99 € seems much less than 10 € to us and we are more inclined to buy. This trick refers to the cognitive bias of round numbers. A number ending in 0 is rounder than one ending in 5, which is rounder than any other number. And if we go beyond the decimal point, we find even less round numbers.
The user is more predisposed to purchase the more specific the price. For this reason, prices are often given with great precision, remaining a few cents below the initial price. In this way, the barrier of the round number is broken and the perception is that of discounting.
Greater specificity, brings the user back to concrete reality. Lewis Carroll rendered this well in one of his stories:
“Don’t interrupt,” Bruno said as we arrived. “I’m counting Pigs in the field!”
(Lewis Carroll, in “Sylvie and Bruno Concluded.”)
“How many are there?”, I asked.
“About a thousand and four,” Bruno said.
“You mean ‘about a thousand,'” Sylvie corrected him. “It’s not good to say ‘and four’: you can’t be sure about four!”
“And nothing could be more wrong!” exclaimed Bruno triumphantly. “It’s really the four that I can be sure of; ’cause they’re here digging under the window! It’s of the thousand that, just offhand, I’m not sure!”
The cognitive anchor bias and the crossed-out price
Another widely used and effective strategy is one that relies on the cognitive anchor bias. Think, for example, of the keynote during which Steve Jobs presented the price of the iPad. It starts with a price: $999 (not a round number, as we saw in the previous point). He explains the fantastic features of the product is then concludes by saying that it is on sale for €499.
Steve Jobs’ speech is perfect. Anchors listeners at a very high price, makes them fall in love with the product, and then proposes a lower price. Apple’s co-founder had this price in mind from the beginning; the reader did not. And now the iPad looks like the real deal. Good job Steve!
We see the same concept applied during the sale period or Black Friday, but also for other types of offers. In an e-commerce card, printed catalog or banner ad, the anchoring technique is rendered visually with the crossed-out price. In addition to crossing out this text, it is a good idea to use smaller font size and font weight, but also a less obvious colorthan the final price.
Replace the currency symbol
The dollar sign is what we see in Scrooge McDuck’s eyes whenever he sniffs out a bargain. It is right to show the price and make it obvious, but sometimes it can be counterproductive to forcefully push the user’s mind to the wallet. Symbols of currencies, such as that of the euro (€) or the dollar ($), call up certain frames in the reader’s mind and send her immediately to the concept of spending.
For this reason, some people prefer to use formulas such as “EUR” instead of “€” or “USD” instead of “$” and use a smaller font size to indicate them. The meaning is the same, and the user immediately understands that we are talking about price, but his mind does not directly associate it with the concept of spending. In other words, it’s not about what you say, but how you say it.
Divide the price into small parts and make it familiar
Is it better to spend 365 € or the equivalent of one coffee a day? According to logic there is no difference, but from the gut the second option seems much cheaper. In this case, two tricks come into play.
The first concerns the division of a large number into smaller units. It is the example of payment in convenient installments. With this technique, the mind starts from a high perceived value of the product (anchor bias), then is brought down to a much lower figure. At a later time he does the calculation and finds out the total sum, but by now the concept of savings is there, tacked on.
The second trick, through abstraction, reconnects the mind to a cognitive frame that draws directly from lived experience. Let’s make a similarity between the price and value of something we buy daily without thinking much about it. Coffee is the perfect example, at least in Italy. How much coffee do we consume in a day? And there goes our mind immediately to underestimate the real cost of the product we are buying.
Obviously, we cannot write “like a coffee a day” in an e-commerce product sheet or catalog. However, it could be an effective expression for an advertisement if we are in an intermediate position of the purchase funnel.
Propose alternatives, but point the way
Are you undecided between a €500 smartphone and a €1,000 smartphone? I’ll add a €1,200 one for you. Thus, you can have the top of the line with just €200 more than the middle one. This is a technique that is mainly applied at the planning stage of the business offer. What we are interested in knowing in this article is how to show prices when we need to compare different products.
Think of the very common example of offering different services. Very often we have four options. At the extremes we find the very expensive one that has everything you could want and the very cheap one that has very little content. Then there are two intermediate solutions: the third is the one we would usually want to sell and the second is the alternative we are willing to accept.
In this case, we can highlight the best choice for us by using graphic elements, labels such as “best seller,” or colors (orange usually prompts action, while yellow attracts attention and red expresses urgency). In this way, we are apparently proposing a choice; in reality we have already decided which product our customer will buy.
The perfect price tag
The price tag can be a crucial element in making our product seem irresistible and increasing the conversion rate. There is nothing new about this: these techniques were already known to advertisers in the 1960s and 1970s, we have seen them many times online and offline, we probably even used them without realizing it.
Before we apply them, we need to analyze the strategy, the product or service being sold, the context, the channel through which we are communicating, the tone of voice, the target customer, and the point in the purchase funnel at which we are located. At this point, we are ready to tell the customer how much the lobster costs. We have all the elements to choose the techniques that will make our price tag perfect.
