irrational pricing

Newsletter



Learn to increase your revenue from pricing case studies.

 

I design pricing and options that influence people’s decisions.

Because how you design choices, you design decisions and behaviors.

  • Behavioral psychology
  • Decision science
  • Cognitive biases
  • Nudges
 

I publish a few case studies every month. I choose a product/service in each case study. I explain how they will increase their revenues with their pricing strategies.

It’s free.

0% unsubscribe rate

Makers love it.

Welcome to the Pricing Wizardry!

Which package would you choose in a pricing as below? Choose the best deal for you. I will predict your choice.

( You’re not buying anything. It’s just a guessing simulation. Just choose the best deal for you in a pricing like this.)

Package 1

$ 29 Monthly
  • create 5 chatbot
  • 500 questıons
  • 100 pages upload

Package 2

$59
$ 39 Monthly
  • create 50 chatbot
  • 5.000 questıons
  • 5.000 pages upload
ONLY FIRST 20

Package 3

$ 99 Monthly
  • unlimited chatbots
  • unlimited questions
  • unlimited uploads

Show the results.

How you design options, you design decisions and behaviors.

It’s very likely that you are buying pack 2 too. And about 70-80% of people prefer the 2nd package this pricing.

Because I carefully designed this pricing hypothesis for people to choose package 2.

We behaviorally tend to choose pack 2 in a pricing design like this. A ridiculously advantageous (profitable) deal in this pricing design is package 2.

Only a small minority buys pack 1 and pack 3. (There are reasons for that.)

With scientifically proven theories such as Libertian paternalism, nudging, cognitive biases, people’s decisions and behaviors can be influenced.

Just like I influenced your decision for pack 2.

Package 1

  •  

Package 2

  •  

Package 3

  •  

Here's how decisions are influenced using behavioral psychology

With its price and pack features, pack 1 is an anchor that makes pack 2 feel like a profitable deal.

→Cognitive Biases; Anchoring bias, Framing effect

$59 is another anchor. It makes the package feel more advantageous than usual by offering an incentive.

Cognitive Biases; Anchoring bias, Incentives

“Only first 20” creates scarcity. This triggers loss aversion. Procrastination is avoided and creates urgency to buy right away.

Cognitive Biases; Scarcity, Urgency, FOMO

Pack 3 is priced at $99, making the price of pack 2 seem very reasonable (because the features in pack 2 are more than enough)

Cognitive Biases; Confirmation bias

Package 1

$ 29 Monthly
  • create 5 chatbot
  • 500 questıons
  • 100 pages upload

Package 2

$59
$ 39 Monthly
  • create 50 chatbot
  • 5.000 questıons
  • 5.000 pages upload
ONLY FIRST 20

Package 3

$ 99 Monthly
  • unlimited chatbots
  • unlimited questions
  • unlimited uploads

If there was classic/linear pricing?

This is what we see in almost every product and SaaS.
Probably yours too.

Most products make pricing classic/linear. That leaves potential customers free to choose.

For example this.
The package is not 1 anchor. And there isn’t much reason for potential customers to choose pack 2.

Buying rate of users will be almost much like this.

Package 1

$ 19 Monthly
  • create 15 chatbot
  • 1500 questıons
  • 1500 pages upload
Buying Rates for Package 1
55%

Package 2

$ 39 Monthly
  • create 50 chatbot
  • 5.000 questıons
  • 5.000 pages upload
Buying Rates for Package 1
35%

Package 3

$ 99 Monthly
  • unlimited chatbots
  • unlimited questions
  • unlimited uploads
Buying Rates for Package 1
10%

See its impact on revenue


Here's the impact on revenue

Classic Pricing

Irrational Pricing

Package 1
55%
Package 2
35%
Package 3
10%

Buying Rates of Users

Package 1
20%
Package 2
70%
Package 3
10%

1045

1365

990

MRR of packages by %

580

2730

990

3400

Total MRR for 100 Paid Users

4300

40.800

ARR for 100 Paid Users

51.600

+26.5%


Here's the impact on revenue

Buying Rates of Users​

Classic Pricing

Package 1
55%
Package 2
35%
Package 3
10%

Behavioral Pricing

Package 1
20%
Package 2
70%
Package 3
10%

MRR of packages by %​

Classic Pricing

1045

1365

990

Behavioral Pricing

580

2730

990

Total MRR for 100 Paid Users

Classic Pricing

3400

Behavioral Pricing

4300

ARR for 100 Paid Users

Classic Pricing

40.800

Behavioral Pricing

51.600

+26.5%



Don't leave money on the table

 

Learn to increase your revenue by designing your pricing with behavioral psychology.

It’s free.

Be part of the 213 makers who’ve already discovered this magic, before it becomes widely known