INSIGHT #10 - Price Experiments

Dear Florist,

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Here is a really interesting experiment that shows the power of offering price points.

People were offered 2 kinds of beer. Premium beer for $2.50 and bargain beer for $1.80. Around 80% chose the more expensive beer.

Now a third beer was introduced, a super bargain beer for $1.60 in addition to the previous two. Now 80% bought the $1.80 beer and the rest $2.50 beer. Nobody bought the cheapest option.

Third time around, they removed the $1.60 beer and replaced with a super premium $3.40 beer. Most people chose the $2.50 beer, a small number $1.80 beer and around 10% opted for the most expensive $3.40 beer. Some people will always buy the most expensive option, no matter the price.

You can influence people's choice by offering different options. Old school sales people also say that offering price point options will make people choose between your plans, instead of choosing whether to buy your product or not.

How to test it: Try offering 3 packages, and if there is something you really want to sell, make it the middle option.

Comment from Simon: Try it in the shop or on your website and let us know if you see customers choosing the middle option.

Simon Stirling and the Direct2Florist Team