I’ve already covered landing page best practices in a previous post. But simply creating great landing pages isn’t enough…You need to constantly tweak them to see how your audience responds and possibly increase your landing page conversions. There’s no shortcut to the iterative CRO method, but there are certain simple landing page optimization tactics that work more often than not. If you belong to the 78% of businesses that aren’t satisfied with their conversions, then you can leverage these tactics as starting points in your optimization.
Landing page optimization tactics #1: Leverage decoy pricing
Price is one of the major considerations for a consumer while purchasing. If you underquote and don’t value your product enough, then your business will lose out on profit. Similarly, if you quote high, then you’ll see lower number of sales.
In both cases, your business will see lower revenue.
So how do you find optimal pricing…?
How about surveying your audience?
I am sorry to break it to you, but people are clueless about how pricing is done.
In his book The myth of fair value, author William Poundstone says that we mostly function by guesstimates. And that we only have a “vague recollection of what things are “supposed to cost.””
Let me introduce you to a classic psychology-based pricing method that helps the consumer in evaluating the value of your products…
Basically, you’ll introduce an obviously useless price package on your product. And it acts as a contextual cue only to nudge the consumer to buy the price package that profits your business more.
Here’s a diagrammatic representation of how this pricing method can make the consumer feel that he’s making a reasonable choice.
But does the decoy effect really work?
In the example below, The Economist Magazine leverages decoy pricing of $125 through the middle option (print subscription).
Dan Ariely performed a test on 100 bright MIT students asking them to choose a subscription model from the above options.
Unsurprisingly, nobody chose the middle option. And 84 students chose option C.
Since nobody chose the middle option, Ariely removed it. Now he asked 100 other MIT students to choose between the remaining two subscriptions.
And surprisingly, 68 students now chose the cheaper option.
Hence, the middle option was a convenient comparison reference.
In the TED Talk below, Dan Ariely explains how it’s easier for consumers to make pricing decisions when they can base them off something.
Now, here’s an example of Apple leveraging the decoy model that you might relate to better.
Look at how the 32GB model is presented as the most valuable by Apple.
When you’re ready to shell out $229 for buying the 16GB model, why wouldn’t you give another $70 to double your storage?
And if you decide to buy the 64GB model, then you’ll need to pay an additional $100. Plus you don’t get any other additional features.
Again, the decoy pricing model works because people don’t have an internal value meter. When you provide an inconvenient variation of your product, then the relatively-beneficial one will be the most purchased.
Now let me share another useless price test that Carter & Kingsley ran for one of their clients.
They included an irrational package to the offer page, resulting in a 114% increase in sales.
Unbounce went a bit further to leverage the decoy effect. They made up an inferior product and tested it on their customers.
233% increase in conversions with the majority of people (86%) buying their expensive yearly plan.
Creating a decoy on your landing page won’t require a lot of time.
- Step 1: Ask customers about the core features of your product
- Step 2: Introduce one package (let’s call it B) that contains only the features you found in step 1. And create another variation of your product (let’s call it A) with all the features that you WANT people to buy.
- Now create another A- decoy: a slightly worse option than A.