What Lord Sugar, Rocky Balboa and Sherlock Holmes can do for your business

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2 Comments Mar 24, 2015 blog

How to always give your website visitors the right options at the right price…

Have you seen the film Rocky? In one fight, Rocky is hit so hard, he ends up seeing his opponent in triple vision. “I see three of him!” slurs the punch-drunk Italian Stallion.

His trainer’s advice? “Hit the one in the middle”.

That’s what you should do when displaying the price of your products or services.

Go for the middle, with back-up options on either side.

Here’s why.

Centre stage

Have you noticed at the end of any race, the winner stands on the middle podium?

Or how in the Apprentice, Lord Sugar takes his place in the middle seat?

And when a band performs live, the singer usually stands in the middle?

Now, imagine you’re pitching to a panel of 3. The one in the middle will automatically seem to be the most senior in rank, at least initially.

In visual situations, we’re conditioned to think the middle is the most important, or the most “authoritative”.

Good things come in 3

Let’s say you’re selling web hosting.

To make a profit on a customer, you need them to sign up to a service that costs £50 a month. You offer all the extras like setup, support and configuration, but £50 is the magic number.

Giving one option only is a high-risk game. You’re saying: “Take it or leave it.”

The problem is, some people will always leave it.

Give lots of options, and it becomes hard to choose. You risk what marketers call analysis paralysis.

Offering 3 options is a sign of compromise. It shows you’re open to negotiation. Your target market feel more in control because you’re offering a menu, rather than an all-or-nothing deal.

And you’re also, in a subtle way, advertising that you cater for different types of customer.

So you’ve got 3 to display, and you’ve placed the £50 option is in the middle…

…what about the other 2?

Drop the anchor

You use them as anchors.

People need an anchor to help them judge what’s good or bad. They can then compare and decide what’s good value.

Because “we don’t have an internal value meter that tells us how much things are worth”, we “focus on the relative advantage of one thing over the other, and estimate value accordingly”, explains Dan Ariely in his brilliant book, Predictably Irrational.

If you don’t know this book, It’s full of case studies showing how we make decisions based on what we think and feel, rather than solid logic…

…including how we anchor things, especially prices.

Think different

He gives the example of the Economist magazine, which offered three subscription types:

  1. Web-only subscription: $59
  2. Web and print subscription: $125
  3. Print-only subscription: $125

How could 2 and 3 be the same price?

“I am pretty certain they wanted me to skip the web-only option…. and jump to the more expensive option of web and print”.

How could Dan know this?

The Economist’s marketers, he reasoned, knew about anchoring.

Option 2 offers free access to the web version when compared to option 3. Free access? That must be a bargain, right? Who doesn’t want a freebie!

So on one side of your £50 option, put your anchor.

People will use that to compare the other options.

OK, expensive anchor on one side… what next?

On the other, show a deal that is obviously not good value compared to your middle option.

Consider making it only slightly cheaper, and with far fewer extras.

This is your “decoy”.

Another nudge

How do you make it even more obvious?

Add clues to your copy.

Below, 123-reg have labelled the middle option “Most popular”:

Let’s say you’re targeting startups.

Label the £50 option “Popular with startups”, or something similar.

They’ll think “Perfect for startups? We’re a startup! Let’s go for that.”

The other two options can be labelled something that wouldn’t appeal to startups.

Something like “for beginners” and “de luxe”.

Solving the mystery for your audience

At this stage you might be thinking: “Decoys? Clues? Anchors? This all sounds a bit Sherlock Holmes to me…”

You need to do this for your audience…

…because you’re helping them make the right choice.

Have a look at some websites offering subscription models. You’ll find many use anchoring.

This one, from www.copy.com, is a bit different:

They’ve used different calls to action on their buttons.

Look at the left option. Free is a word that will always grab people’s attention.

Add that to the amount of features underneath, and it looks like they’re encouraging people to go for that one.

Incentives

With the offer of a “free 30-day trial” you can guess which option Hootsuite want you to try:

One more thing…

I’m not saying 3 is always the model to choose.

You always need to test things like this… but 3 is the best place to start.

You can then start experimenting with different calls to actions, different features, in different orders.

Maybe you’ll discover that 4 hits the spot? (screenshot from Fasthosts)

What about you?

Are you offering 3 options?

More? Fewer?

What are your reasons? Which combination is working best for you?


Comments

  • Mike S
    Mar 24, 2015 at 9:45 am Reply

    Hi Steve,totally agree with the rule of three..at my old software company we ALWAYS offered three choices..launching my start-up soon which will rely on subscriptions, so definitely will keep doing this..if it ain’t broke don’t fix it! Kind regards,Mike S (by the way going to email you tomorrow about something relating to my launch)

  • Steve Alphabet
    Mar 24, 2015 at 9:51 am Reply

    Hey Mike. thanks for the reply. Looking forward to hearing from you!
    Steve

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