The Three Prices Approach

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Transcript

Pricing tactics 30 prices approach these scientific research was killed in a bar. They were approximately 700 participants if I'm not mistaken. Initially, the bar offered two types of Beer Beer that was priced at $1 80. And another price that 250. Approximately 80% of the participants bought the beer that costs 250. Later, a third beer priced $1 60 cents was added.

The statistics showed that 80% of all participants had bought the beer priced at $1 80 cents. The previous leader in sales cut lost its position. After analyzing the reasons for this, the scientist formulated the role of the domination of the price in the middle. In order to check the validity of his role, he took out the $1 60 beer and added a beer priced at $3 40 cents instead. The sales showed he was right 85% of participants had bought the building the middle, cost $2 50 cents 10% had bought the beer $3 40 cents, and 5% the beer $1 80 cents. Thus, the revenue of the bartender was maximized at our consultancy company, we are using regularly this pricing tactic with our offline seminars on working perfectly.

Over 85% are buying the price option in the middle Though several of our customers also report the same results, I can assure you that the theory is working in practice. There is one major conclusion out of this entities, we could increase our revenue on profits just by offering enough pricing options. Here is an example from internet. The company is offering three pricing options. What is wrong with this offer? How can we improve it?

Kindly ask you to write down your recommendations. Please pause the video and continue whenever you're ready. What's wrong in the design? Do you see the designers have used orange cower also in the blue and green options. Additionally, they have shallow the orange option so that it looks like it is in front of the others. The focus is said on the middle orange option between know from the role of the medium price domination, that even without all these efforts, customers attention will be concentrated in the middle.

So all efforts are in the wrong orange square. The use designer solutions zeroes the chances of the green option to bring in revenue. As increasing revenue and profits is a constant management test. Designs should stress the green option. What our recommendations put the stress on the most expensive section Among those three varieties section should be orange as it is a call to action cower. Also use the size of the options.

The cheaper option should have the smaller size. The most expensive option should have the biggest shape. Call to Action curls are the hot ones. yellow, orange, pink, purple, right? on similar of the kind. In this example, the stress on the most expensive option, which is okay.

But how could we improve that offer? Please pause the video and write down your recommendations continue with When you're ready, I will continue now. You certainly remember we commented that the subconscious mind is perceiving the shapes of the numbers, while simultaneously our logic is calculating the differences. Well, there is the contradiction in this offer, which will probably reduce the sales. Look at the rightest option 140 is greater number than 98. The mathematically smaller 98 Bulgarian level price is written in much bigger font.

The logic speaks small but subconscious mind Christ bigger. I deeply believe that contradictions between conscious and subconscious mind will not assist the customer in deciding which is the right price. The good to do For her or him on to remember, this is the purpose of the right pricing. Here's another implication of the three prices tactic. This is a research held by Dan Ariely, Professor of Psychology and behavioral economics at Duke University, in front of two groups of students 100 each. The first group had to choose a subscription for the Economist magazine, a monthly options $59 for online subscription $125 for print subscription, and the same $125 for both as a package.

Look at the upper half of the slide. The results were 16 students subscribed for online price $59 and 84 students for the package nonstop. For the print version only, which was very rational By the way, the professor decided that if not subscribed, then this useless option had to be taken off. So he did. To the second group of 100 students, he offered only two subscription options. Look down the right $59 for online subscription, and $25 for both weapon print.

He was astonished to count that 68% subscript for the online option, and only 32 for the weapon print one. After several other experiments, and a thorough analysis, Professor Ariely concluded that the useless option actually is very useful. It assists the potential buyers To figure out, which is the good deal. This tactic is very popular among tourist agencies, where it is used to lead the tourists choose the right hotel, naturally by agents criteria. Hope you have enjoyed this tactic, as we're continuing with the fragment price effect.

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