Something to Ponder on Pricing: Contrast Theory

[Mindy H]

This was being discussed on another board. I thought that it was interesting and wanted to hear others thoughts on it.


contrast theory

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The Shocking Secret About Your Prices That Can As Much As Double Your Sales Average... Today - This Very Day

Immediately After You Read This Page!


OK, see it’s like this... Take two men. One handsome - like a Greek god with chiseled face and a strong muscular body - a guy women would swoon over. The other fellow, kind of ordinary. Pleasant looking, just sort of okay.

Now stand them together, right next to each other.

What happens? The handsome man makes the common one appear even more common, and this pleasant looking, but common man makes the handsome man look exquisite by comparison.

And the same thing happens if you stand two women together. The prettier one makes the less attractive woman look that much less attractive, and vice versa. You wouldn't be aware of it if they were apart.

If you saw them individually, in different locations, on separate days, you wouldn’t notice, but put them together and you do.

This is called contrast principle.

Imagine two water pitchers filled with room temperature water. Now imagine yourself putting ice cubes in one, and see yourself sticking one hand in to swirl the cubes. Keep your hand in there until the water gets cold from the ice and your hand becomes uncomfortable. See what it feels like.

Now pull your cold hand from the ice water and place both hands in the room-temperature water.

What happens? The room temperature water will feel downright hot to your cold hand but not to the other...yet you know they are in the same water. By comparison to the ice water, this room temperature water feels hot to your cold hand. That is contrast principle.

OK, but what’s this got to do with price?

Let’s say you are selling left-handed whatchamacallits - incidentally left-handed ones are the best kind.

And let’s say your whatchamacallits are priced at $1000, $2000, $3000, $4000, $5000, and $6000. When you meet a customer and begin showing your sample whatchamacallits...

...if you start by showing the $1000 model and work your way up in price, contrast principle will make the $6000 version seem outrageously priced, too extravagant, way too expensive.

However, if you start by showing the $6000 whatchamacallit first and get the sticker shock out of the way, contrast principle will work in your favor.

By the time your sales presentation gets down to the lowly $1000 model, it will seem too cheap, not good enough.

The $20,000.00 Photo Album

Here is the story...

Recently I meet a wedding photographer who shows prospective brides and grooms a $20,000.00 photography album as one of the packages she offers.

Yow! $20,000.00 for wedding photographs! You’ve got to be kidding.

But then she explained, “I’m really not expecting anyone to purchase this package. It is my “whopper,” a package so extravagant it makes all my other photography packages seem more affordable by comparison.”

Customers choose to make their purchases a few notches higher on the price scale because they now want more than they originally planned. All without any sales pressure!

Simply by offering the “whopper” she was able to double her sales averages.
Not in her wildest dreams did she ever expect to sell one.

To her complete surprise during the past 12 months not only has the “whopper” doubled her sales average, but three couples actually bought it – the $20,000 photography package for their wedding photographs!

What is it you are NOT offering because you believe people won’t spend that much?

What have you not been offering that could help raise your sales averages?”

How can you package products or services to generate your own “whopper?”

Starting high will outsell the start-low approach by enough to as much as double your sales averages all without increasing your regular prices.



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[S-Man]

I like it. Thanks for sharing. Something to think about.

[alamoshutterbug]

Great post, I'll be giving my price list the ol' switcheroo soon.

[ThiNguyen]

Interesting psychology

[Mindy H]

We'll see if it works! I've been listing packages low to high with the thinking that I don't want them to have sticker shock right off the bat. I'm going to switch them around and see what happens.

[jeffkohn]

The only problem with this approach, some people really hate being manipulated. It's why I don't like dealing with sales people of any kind, in any industry.

[Mindy H]

Originally Posted by jeffkohn

The only problem with this approach, some people really hate being manipulated. It's why I don't like dealing with sales people of any kind, in any industry.

Do you find that reversing the order of a price list or adding a high end package is manipulation?

[jeffkohn]

Originally Posted by Mindy H

Do you find that reversing the order of a price list or adding a high end package is manipulation?

Showing a super-expensive package so that that the other packages seem more affordable, specifically the example in the article of the $20,000 "whopper" package. If a wedding photog had shown me a $20K package with a straight face I would have walked before they ever had a chance to get to the more affordable packages.

[Mindy H]

Yeah...I can see your point there. $20k is on the manipulative end of things for us regular folks. The photographer that they are speaking of though; the pricing isn't grossly overexagerrated like it would be for most of us. I think adding the whopper at a rate that fits a bit better with your own price scale would be a bit more logical....hit em hard to make them like the rest, don't flat out make em faint.

[toverman]

Mitche Graf suggests this technique in his photographer-specific "Power Marketing" book. I think if it's a legitimate package that someone can handle offering rather than just a golden carrot on a stick, it has value. To build a fantasy package that goes beyond a photographer's ability to deliver just for the sake of having a high price is manipulative.

There's also the theory that when listing services or packages, say the one you want your customers to buy last.

[S-Man]

^(@ Mindy's last post) That's kind of difficult to do, because if people really start to look at your package pricing, then look at your a la carte prices, the math won't add up and they'll start to be suspicious.
One of The purposes of packages are to make people feel they're getting a better deal than choosing this and that separately.

Lets say your 'intro' package is $1500. You show them what's included.
Your 'top shelf' package is $5000. They've seen what's included in each package in between.
But you also have an 'ultimate' package of $10,000. You'd really have to reach for alot to make that package seem anything less than ludicrous.

I guess if you can come up with something special enough and sell it enough to make it valuable in their eyes, do it.

[Some Idiot]

This thread makes me hungry

whatchamacallits (great candy bar) and whopper's (both candy and a burger) !! yummy

No seriously, it's a good thought, i think it's why Hooters has a bottle of Dom on the menu, makes you order a $7.00 hamburger and not even blink.....

[ddphotography]

I agree with the PP, I am hungry!!

[Mindy H]

Originally Posted by S-Man

^(@ Mindy's last post) That's kind of difficult to do, because if people really start to look at your package pricing, then look at your a la carte prices, the math won't add up and they'll start to be suspicious.
One of The purposes of packages are to make people feel they're getting a better deal than choosing this and that separately.

Lets say your 'intro' package is $1500. You show them what's included.
Your 'top shelf' package is $5000. They've seen what's included in each package in between.
But you also have an 'ultimate' package of $10,000. You'd really have to reach for alot to make that package seem anything less than ludicrous.

I guess if you can come up with something special enough and sell it enough to make it valuable in their eyes, do it.

Yeah...I agree....I think a range of $1500 to $10k is still on the manipulative end of things too. For portrait work anyway....maybe it's an easier stretch for wedding photographers.

My packages start at $750....with several others going up to the $2500 mark. I'm just going to reverse the order in which they are displayed, plus add a $3200 package. I don't think that's out of whack or bordering on manipulative....I've had orders over $3k even without the package, so my 'whopper' isn't really that far of a stretch. And...there is value in it because the way the packages are set up, the more they spend, the greater the discount percentage.

[S-Man]

^See, that's reasonable.
All I was saying is it has to make sense. It's a good idea to put into practice though.
I may re-do my price info packets too. As it is I have the cheapest to the highest listed in that order.