The Price Illusion

Making Value Pop

Today, we're diving into two powerful psychological tactics that play with how consumers perceive price and value: anchoring bias and price juxtaposition. Get ready to learn how to make your offerings look even more appealing!

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TIP 3: Power of the Anchor

The Classic "Was/Now" Display: This is retail 101 for a reason! Clearly display the original, higher price next to the discounted price. Make the discount visually prominent with different colors or larger fonts.

• Real-World: Clothing stores, electronics retailers, and online marketplaces use this relentlessly during sales events or seasons like Christmas. 
• Action: For limited-time offers or promotions, always showcase the "before" price. Quantify the savings (e.g., "Save 30%!") to make the impact even clearer.

Tiered Pricing with a Premium Anchor: Offer a high-end, feature-rich (and higher-priced) option alongside your standard offering. This makes the standard option seem more reasonable in comparison.

• Real-World: Software companies often have "Basic," "Pro," and "Enterprise" plans. The "Pro" plan looks like a sweet spot next to the more expensive "Enterprise" option. Also consider Tip #5 in the next post.
• Action: If you offer different levels of products or services, strategically price a premium option to make your target offering appear more valuable.

Highlighting Competitor Pricing (Carefully): If your product offers similar or better value than a competitor's higher-priced option, subtly highlighting this difference can act as an anchor.

• Real-World: "Our [Feature] vs. Competitor X's Similar Offering at $XX More!" Learn more about the pros and cons of competitive-based pricing.
• Action: Be factual and avoid being overly negative about competitors. Focus on the value your price point offers in comparison.

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TIP 4: Art of Price Juxtaposition

The "Good, Better, Best" Display: In a retail setting, place your mid-range product next to a clearly higher-priced "premium" option. This makes your "better" option seem like a smart compromise.

• Real-World: Wine stores occasionally arrange bottles this way, making a $20 bottle look appealing next to a $50 one.
• Action: In your physical or online store, consider how product placement can influence perception. 

Featuring Alongside Premium Brands (Partnerships & Mentions): If your brand aligns with a more established or luxury brand in terms of quality or values, even a subtle association can boost your perceived value.

• Real-World: Citi credit cards earn American Airlines miles with qualifying purchases. Nike and Apple partnered to offer consumers activity tracking technology in athletic gear with iPhone apps and the Apple Watch. Learn more about co-branding.
• Action: Make sure the brand collaboration is relevant and authentic. 

​Highlighting "Features Similar to Luxury Brands": In your marketing copy, you can subtly draw comparisons to premium offerings without directly claiming to be the same.

• Real-World: "Enjoy the smooth glide and ergonomic design, similar to high-end styluses costing twice as much."
• Action: Identify key features or benefits of your product that resonate with those found in more expensive alternatives and highlight them. Similarly, avoid being negative about the other brand.

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Anchoring bias and price juxtaposition are powerful tools for shaping customer perception.

​By strategically setting initial price points and carefully positioning your offerings, you can make your value proposition more compelling and influence purchasing decisions without necessarily lowering your prices.

It's about creating the right frame of reference for your customers to see the true worth of what you offer.

Remember, these are powerful ways to connect with your consumers, but the magic truly amplifies when your team (aka employee) knows how to shine.

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GO TO TIPS #1 & #2

GO TO TIPS #5 & #6