Jump to content

Earn More Money With “Decoy Pricing” – A Proven Method to Increase Revenue and Sales


smashradio
 Share

Recommended Posts

Guest freelancerjabir

I used to increase the price in a Steve Job's Method. Suppose a thing I am selling for 100$ so what I do, I ask my client this work is for 150, but I will only provide it to you for 130$. Most of the cases client agree to work on the pricing of 130 : ) 

Link to comment
Share on other sites

As a tactic, I like this about as much as I like my supermarket thinking I'm stupid enough to think that €1.99 is so much less than €2, and most banks nowadays asking for a fee that will cost you more than all those €0.01 coins you bring them, once they spill over from wherever you empty them into to get your pockets to an acceptable weight and smoothness, but, yes, it's a proven method.

Sometimes, I wonder what our world would look like, if everything, really everything, would cost what it really was worth, and, yes, that includes the "real cost", environmental, human, and everything. 🌈🦄

But, yes, it's a proven method, just like that people will rather buy a jar of marmelade if you confront them with 3 or so options vs just one, or ten.

  • Like 32
Link to comment
Share on other sites

14 hours ago, theratypist said:

I can't believe this is on page 7. Hahaha but this was insightful and good point. Thanks for sharing monsieur!

Thanks mademoiselle! The best advice usually is on page 7. That's the new matchmaking algorithm in the forum, trying to match sellers with the best advice for them. It's a truly innovative feature that will replace the forum soon. 

Are you ready to meet your next advice? 

12 hours ago, freelancerjabir said:

I used to increase the price in a Steve Job's Method. Suppose a thing I am selling for 100$ so what I do, I ask my client this work is for 150, but I will only provide it to you for 130$. Most of the cases client agree to work on the pricing of 130 : ) 

I sure hope you didn't list your rate as 100. That would be dishonest. But price anchoring can certainly be useful. As long as you're not listing your gig at 100, then tell the buyer it's 150, in order to make them pay 130. 😂

6 hours ago, miiila said:

As a tactic, I like this about as much as I like my supermarket thinking I'm stupid enough to think that €1.99 is so much less than €2

If you don't like the tactic, you don't have to use it. But this is business, and using psychology to increase your earnings is part of that. But my starting point is always that the highest price-tier is worth it. It has to offer something that I actually believe is worth it. So let's say I offer a package for 500 next to my 100 dollar package, because I want to sell more of the 100 dollar package. I would still make sure the 500 dollar package had a value according to its price. It wouldn't just be a price pulled out of thin air. 

It doesn't make sense for all services, though. Our translation gig is an example: it's priced per word. it wouldn't make sense to use decoy pricing there. 

Edited by smashradio
  • Like 28
  • Up 2
Link to comment
Share on other sites

2 hours ago, smashradio said:

If you don't like the tactic, you don't have to use it.

I know, but thank you. Ah, I shouldn't access topics through the notifications of/about people I follow, it doesn't show the forum category then, and for some reason my brain always thinks I'm in "Casual Conversations" or whatever it's called, probably because it's often the only category I have ticked, when checking the forum via the category list page, but this probably was a "Seller Tips" post, I guess, sorry, I'll check next time.

  • Like 25
Link to comment
Share on other sites

On 8/14/2022 at 11:06 PM, smashradio said:

A trick many retailers use, which we as Fiverr sellers can utilize too, is "decoy pricing." 

What is that, you ask? It's the practice of introducing a higher-priced top-tier package to make your mid-tier one seem more reasonable. 

Here's an example: 

Suppose you want to sell a package for 100USD, which is your most expensive package. 

Fewer people will order it because the package next to it costs less. But if you introduce a top-tier package for 500 dollars and charge 100USD for the mid-tier, it makes it appear more affordable. It's still the same deal. But it looks more appealing. 

Clients are more likely to choose the mid-tier package if you make it seem like a great deal.

By pricing your mid-tier at the rate you'd like to earn per order and adding a more expensive top-tier package, you'll sell more of the mid-tier one. 

Studies have backed this up. 

So if you want to make a higher-priced package appear as the best option, put an even more expensive package next to it. 

oh wow thats very insightful. Actually now thinking about it, I may have unknowingly used this technique when negotiating prices with my clients. Many of my clients wanted very huge tasks (which a programmer would need months for), when I told them the realistic price tag for a high quality programmer for their ideas, many were very surprised. What I succesfully did was offering this "mid" tier package with their ideas stripped down to the core ideas and strongest ROI for their product and with much less effort to do. It was a great selling point. Although I may have been low balling some bigger possible clients, I had manageable orders and still a good price. 

  • Like 29
Link to comment
Share on other sites

Please sign in to comment

You will be able to leave a comment after signing in



Sign In Now
 Share

×
×
  • Create New...