Price is one of the essential elements of the product sheet both for e-commerce or paper catalog, but it is also very important for 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. Customer wants to know what’s the price of a bowl of rice before buying and eating it. The price label can increase conversion rate when user is in the final stage of the purchase funnel or can be crucial in the previous phase when he is choosing from a series of solutions.
A few psychological techniques play on the user’s cognitive biases to create an irresistible price label and turn your product into a steal.
What is the right location of the price tag
Obviously, price must be present in an e-commerce and should be distinctly visible, graphically separated from the rest of the content and clear. For advertising or blog article with affiliate marketinglinks, we should show it in case it could be a crucial factor or the user is at a purchase funnel stage very close to conversion. It is not commonplace, in fact in many cases price tag is not positioned well, the reader takes a second too long to find it and he does not complete the purchase.
Do you have to show price or product first? It depends on whether the value of the product is more important for the purchase – for example, a necessary, extremely raee or just an object very similar to user’s values and wishes – or the price – for example in the case of offers, sales or Black Friday.
A research conducted by scientists at Harvard and Stanford analyzed nerve reactions in cerebral cortex during the purchase 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 shown when user is very close to conversion or when it is an important choice factor. Where it should be shown, it depends on the sales strategy we want to ride.
Accuracy pays, go beyond floating-point
On sale only for 9,99 €. How many times have you seen this formula in advertisements? 9,99 € seems to us much less than 10 € and we are more likely to buy. This trick refers to the cognitive bias of round numbers. A number ending with 0 is rounder than one ending with 5, which is rounder than any other number. And if we go beyond the floating-point, we find even less round numbers.
User is more likely to purchase as price is more specific. For this reason, prices are often shown in detail, a few cents below the starting price. In this way, barrier of round number is broken and perception is that of discount.
More detail, brings user back to concrete reality. Lewis Carroll made this well in one of his stories:
“Don’t interrupt,” Bruno said as we came in. “I’m counting the Pigs in the field!”(Lewis Carroll, in “Sylvie and Bruno Concluded“)
“How many are there?”, I enquired.
“About a thousand and four”, said Bruno.
“You mean ‘about a thousand’”, Sylvie corrected him. “There’s no good saying ‘and four’: you can’t be sure about the four!”
“And you’re as wrong as ever!” Bruno exclaimed triumphantly “It’s just the four I can be sure about; ‘cause they’re here, grubbing under the window! It is the thousand I isn’t pruffickly sure about!”.
The cognitive bias of anchoring and the strikethrough price
Another widely used and effective strategy is that based on the cognitive bias of anchoring. Think, for example, of the keynote where Steve Jobs presented the price of iPad. He starts from a price: 999 $ (not a round number, as we saw in the previous point). He explains the fantastic features of the product and then concludes by saying that it is on sale at 499 €.
Steve Jobs’ speech is perfect. He anchors listeners to a very high price, makes them fall in love with the product and then proposes a lower price. Apple co-founder had this price in mind from the beginning; reader did not. And now iPad looks like a total steal. Nice job Steve!
We see the same concept applied on sales or Black Friday periods, but also for other types of offers. On an e-commerce product sheet, on a printed catalog or on an advertising banner, anchoring technique is visually shown by strikethrough price. In addition to ticking this text, it is a good idea to use smaller font sizes and font weights, but also less evident colorthan the final price.
Replace currency symbol
Dollar sign is what we see in Scrooge McDuck’s eyes every time he sniffs a deal. It is right to show the price and make it evident, but sometimes it can be uneffective pushing user’s mind directly towards the wallet. Currency symbols,such as euro (€) or dollar ($), recall some frames in reader’s mind and immediately push it to the concept of spending.
For this reason, some prefer formulas such as “EUR” instead of “€” or “USD” instead of “$” and using smaller font to refer to them. The meaning is the same and user immediately understands that we are talking about price, but his mind does not associate it directly with the concept of spending. In other words, it’s not about what you say, it’s about how you say it.
Divide the price into small parts and make it familiar
Better to spend 365 € or the equivalent of a coffee a day? According to logic there is no difference, but gut feeling is that the second option is much cheaper. In this case, two tricks come into play.
The first concerns splitting large number into smaller units . The example is that of payment in convenient installments. By this technique, mind starts from a high perceived value of the product (anchor bias), then is brought to a much lower figure. Later, it does calculation and find out the total sum, but now the concept of saving is there, stuck.
The second trick reconnects, through abstraction, your mind to a cognitive frame that comes directly from life experience. Let’s create a similarity between the price and the value of something we buy daily without thinking too much about it. Coffee is the perfect example, at least in Italy. How many coffees do we consume in a day? And here our mind immediately goes to underestimate the real cost of the product we are buying.
Obviously we can not write “like a coffee a day” in the product sheet of an e-commerce or in a catalog. But it could be an effective expression for an advertisement, if we are in an intermediate position of the purchase funnel.
Propose alternatives, but pave the way
Are you hesitant between a 500 € smartphone and a 1000 € one? I’ll add you one more at 1200 €. Thus, you can have the flagship with just 200 € more than the middle range. This technique is mainly applied at the planning stage of commercial offer. However, the focus of this article is onhow to show prices when we have to compare different products.
Let’s think about the very common example of offering different services. Often we have four options. At the edges we find the very expensive one, that has everything you could desire, and the very cheap one, that has very little content. Then there are two middle solutions: the third is the one we would like to sell and the second is the alternative that we are willing to accept.
Thus, we can highlight the best choice for us by graphic elements, labels such as “the best seller”, or colors – orange is usually the one that drives action, while yellow attracts attention, and red expresses urgency. In this way, we are apparently proposing a choice; actually, we have already established which product our customer will buy.
The perfect price tag
Price tag can be a crucial element to make our product look irresistible and increase conversion rate. There is nothing new: these techniques were already known to advertisers of the 60s and 70s,we have seen them many times online and offline, probably we have also used them without realizing it.
Before applying them, we should analyze strategy, the product or service sold, context, communication channel, tone of voice, target customer and the point of the purchase funnel where we are. Now, we are ready to tell the customer what’s the price of a bowl of rice. We have all the elements to choose the techniques that will make our price tag perfect.