🔍 A Simple Psychology Tactic To Increase Your Conversion Rate

November 22, 2022

Happy almost Thanksgiving.

On my end, there is a lot to be thankful for:

My parents are in town celebrating with me
My fiancee and I got engaged
Having you as a reader
Life's good

And so, this week every edition will be short, concise, and to the point, so you can enjoy your time off.

This week I'm covering how to optimize your product pricing to increase your conversion rate.

Don't Acquire Another Customer But Increase Profits By 25% to 90%.

That's not a click-bait headline. That's the power of retention marketing.

Because if you can increase customer retention rates by just 5%, you'll increase profits by 25% to 90%.

That's why retention is the new acquisition.

Meanwhile, acquiring a new customer can cost five times more than retaining an existing customer.

This is why you should turn to email marketing to improve your retention rate.

So, Sendin Blue put together the ultimate guide to driving customer retention and loyalty with email marketing.

You'll learn exactly how to retain satisfied customers and reduce churn.

You can download it here.

How To Use Psychology To Improve Your Conversion Rate

Dan Ariely gave a presentation that broke down the psychology behind The Economist’s pricing structure.

The Economist used to have three price points:

Dan Ariely Presentation

Online: $59
Print-Only: $125
Print & Web: $125

Looking at it, the print-only option looks pointless.

But, it’s not.

Dan Ariely led a study where he gathered 100 MIT students and presented them with two different pricing options.

He presented the first 100 students with the current pricing structure:

16% said they’d purchase the online only option
0% said they’d purchase the print only option
84% said they’d purchase the online and print option

But, when Dan Ariely eliminated the middle option and presented it to another 100 students - the results changed:

Dan Ariely Presentation

So, what was the most popular option became the least desired option.

Now:

68% wanted the online only option
32% wanted the print & online option

So, what seemed useless was useful in helping consumers determine what they wanted.

Because the middle option served as a decoy to make the premium purchase look like an unbeatable deal.

This is called The Decoy Effect.

But here’s how to make it even better.

Harry Molyneux asked a great question on Twitter, “Can you guess the winning test variant?”

And one of the variants is more than $20k per month more valuable than the other.

Here are the options:

Harry Molyneux's Tweet

The correct answer is B.

Here’s why:

Harry Molyneux's Tweet

Shifting the best value offer to the right while using an eye-catching color
Displaying the comparison price larger than the discounted price
Displaying the price per day minimizes the mental cost

So, putting it all together:

Use the decoy effect to help consumers determine what they want
Add a middle option that makes the premium purchase seem like a great deal
Use a different color to make the premium purchase eye-catching
Make the comparison price or original price much larger than the discounted cost
Minimize the mental costs by adding a price per day that shrinks the cost with logic

You’ve got your marketing strategy locked down to maximize your campaigns...so you think.

With all those confusing numbers scattered across analytics, spreadsheets, and dashboards, even Count von Count can’t save you. (“2,568 rich media assisted conversions, ah ah...ah?”)

You need a simple way to track your sales funnel’s performance and optimize it for the best conversions.

What you need is... below.

Grab AppSumo’s Black Friday TruConversion deal here and get to proper reporting (it’s a discount on top of the already discounted price!)

Great Marketing Reads and Resources

A simple tool I tested for creating high-converting quizzes
How MasterClass built a $2.7B empire on the backend of SEO
How to succeed on any platform with zero-click content
The easiest tool to create IG Reels and TikTok content fast
How to create a content growth engine

I hope you have a great Thanksgiving with family or friends.

And enjoy a short break.

Thank you for reading,

Alex

Update your email preferences or unsubscribe here

228 Park Ave S, #29976, New York, New York 10003

Publish on beehiiv

Black Friday TruConversion deal two different pricing options winning test variant Count von Count highconverting quizzesHow MasterClass best value offer content growth engine current pricing structure three price points Dan Ariely PresentationOnline Great Marketing Reads Simple Psychology Tactic customer retention rates

🔍 A Simple Psychology Tactic To Increase Your Conversion Rate

Don't Acquire Another Customer But Increase Profits By 25% to 90%.

How To Use Psychology To Improve Your Conversion Rate

You’ve got your marketing strategy locked down to maximize your campaigns...so you think.

Great Marketing Reads and Resources

Key phrases

Older messages

'What Could I Be Missing Here?'

Deal or No Deal

How Pat Riley Communicated a Message

Sunday Thinking

DYGYCON 12, early access for Superior, Care Bears in The Sandbox, the FTX collapse, and more... | Play to Earn #149

You Might Also Like

Marketing Weekly #178

7 Things That Separate The Best Founders From the Less Successful Ones

💀 Judgment Day Dropping Soon: The May 5 Google Update

Emerging managers pull their weight

The Profile: The founder who lost $36 billion in one week & the professor protesting Columbia’s students

Sunday Thinking

SELLING YOUR BUSINESS - THE ELEVENTH HOUR CONTRACT CHANGE

Brain Food: Action Reduces Fear

Recruiting Brainfood - Issue 395

Magical numbers about the returns policy