How to make your premium price seem better value | Nudge Newsletter


Differential Price Framing

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Want people to go premium?

Don’t show them the full price. Show them the difference.

That’s the idea behind differential price framing.

In 2019, David Hardisty¹ at UBC tested it with New York Times subscriptions.

Group A saw this:

– $9.99/month for web + app
– $16.99/month for web, app, print, podcast, crossword

Group B saw this:

– $9.99/month for web + app
+$7/month for all the extras

Same total price. Different framing.

But in Group B, twice as many picked the premium plan.

Why?

Because $7 extra feels easier to justify than $17 total.

You’re not buying a luxury; you’re just upgrading.

Have you used this? Reply to let me know — Phill

P.S. This is inspired by Richard Shotton who will soon appear on the show.

¹Allard, T., Hardisty, D. J., & Griffin, D. (2019). When “more” seems like less: Differential price framing increases the choice share of higher-priced options. Journal of Marketing Research, 56(5), 826–841.

As a behavioural science practitioner, I believe in the peak-end rule.

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