“I wish people bought my courses no matter the price…” If that sounds like I read your mind, keep reading because I might have read your mind. This post ain’t a mindless listicle of psychological pricing strategies. I will share some direct and indirect strategies you can use to sell your online courses.
This post is specifically written for course and membership creators. But the strategies are garnished with examples from across the info-product landscape.
Five Psychological Pricing Strategies
The five psychological pricing strategies we will discuss in this post are:
- Anchoring Effect
- Decoy Effect
- Subscription and Tiered Pricing
- The Power of Free
- Framing and Perceived Value
Let’s jump in with the first strategy if you’re ready.
1. Leverage the Anchoring Effect
Have you heard of the quote, “First impression is the best impression”? If so, that’s the Anchoring Effect.
Simply put, the Anchoring Effect refers to the human tendency to rely heavily on the first piece of information encountered when making decisions. This is not a psychological pricing strategy but just a simple psychological fact. But when you use this wisely in your sales letters or emails, you can unlock sales. Let’s explore a couple of ways to do that.
“Deal Reveal”
When it’s time to reveal the price of your course or membership, share the cost price. Explain the reason behind the cost price of your course in detail first. And then reveal the selling price.
You can go further and discount the selling price to reveal the discounted price finally. By successfully anchoring the client’s attention to the cost price, you make the discounted price look like a “good deal.”
“Price Strikethrough”
You can use the concept of anchoring in limited-time promotions or seasonal discounts. When you have to mention your special seasonal discount price for your membership, show the original price crossed out before the discounted price. This creates a psychological anchor that reinforces the value of your membership.
2. Decoy Effect
One of the most infamous tools used by hunters has been the use of a decoy. Essentially, they put out bait to attract the animal they want to hunt. The Decoy Effect is something that’s been used in pricing too. I know that sounds horrible and cruel when dealing with customers and clients. But what if you could use it to help your clients decide?
The Decoy Effect comes into play when a third, less attractive option is introduced to sway customers towards a more expensive option that you want them to choose. This “decoy” option makes the target option appear much more appealing in comparison.
However, using the decoy effect in your psychological pricing is tricky. If done the wrong way, you can lose the sale. A decoy gone wrong can confuse and overwhelm your clients. So when is the right time to use a decoy? Here are a couple of tips.
- Consider using a decoy only if you cater to more than one target audience segment. That’s why you will find more decoys for food, cars, and consumables.
- Your offer has a component that can be positioned as “don’t compromise on this.”
3. Subscription and Tiered Pricing
Subscription-based pricing has existed for centuries. We’ve seen it in newspapers and magazines since the early 1900s. Today it’s very popular in the SaaS and Apps industry. But why is this popular, and how can it make a difference to your course business? Let’s take a look.
At the outset, the subscription pricing model works great for clients because of the low upfront payment. As a membership creator, it’s great for you because it guarantees a recurring revenue flow. And if that’s tempting enough to consider, you must. But first, you need to check if this is meant for you. From what I’ve seen, there are two kinds of subscriptions you can consider:
- New feature or capability you let members unlock regular intervals (e.g., Audible gives you a new credit every month)
- Access to an unlimited resource pool (Kindle Unlimited offers access to a bottomless pool of ebooks)
One of the best ways to offer subscription pricing is to combine it with any of the other pricing models in this post (or beyond). For starters, consider using a tiered pricing model with your subscription pricing.
Tiered pricing takes advantage of different customer segments and their willingness to pay varying prices. By offering multiple tiers, each with increasing benefits and value, you appeal to learners with diverse needs and budgets, effectively expanding your customer base. While in this context of tiered pricing, I highly recommend you also consider Yes and Yes pricing, which I’m a big fan of.
4. The Power of Free
You want clients to pay you, but you shouldn’t ignore the free. And that’s why I’m moving the freemium model right up to the fourth place in the list of psychological pricing strategies. Free has a special place in people’s minds, turning your offer into an irresistible deal for many.
But there’s just a thin wall between the freemium model and a free lead magnet, and you need to be conscious of it. If the freemium model interests you, here are a few things you might want to consider implementing:
- A free lead magnet offering a quick result
- Follow-up emails explaining and adding value to help your leads get the result (welcome sequence)
- An offer to upgrade to a premium experience
- Emails to present and follow up on your premium offer (sales sequence)
Offering free content as a lead magnet can be a potent marketing tool for course creators. By providing a taste of your expertise through free e-books, webinars, or mini-courses, you pique learners’ curiosity and establish trust in your expertise.
The freemium model also complements upselling strategies, allowing learners to upgrade to premium courses with advanced features and personalized support. This approach can lead to a higher conversion rate and build a loyal customer base that’s more likely to invest in your paid offerings.
5. Framing and Perceived Value
This one is not a mainstream strategy for psychological pricing. But please pay very close attention as without this all your strategies can miserably fail.
As course creators, communication is our job. It will be tough to get our ideas across unless we can communicate clearly. But when it comes to selling, there are two specific aspects of communication you need to look into–they are framing and perception.
Framing refers to how information is presented to influence decision-making. Framing your course or membership offerings to emphasize their value is essential in pricing. Instead of merely stating the price, highlight the benefits, outcomes, and unique features that learners will gain from your courses.
Perception is how people think and process what they communicate. Crafting persuasive course descriptions using positive framing can sway potential learners towards enrolling in your programs. But by focusing on the transformational value of your courses, you increase their perceived worth, making the price seem more reasonable for learners.
These five psychological persuasion strategies are very powerful, and I want you to consider picking one and putting it to use. Let me know how it goes in the comments. In the next post, I’ll share five more psychological persuasion strategies.
If you want to learn more about selling online courses and memberships, signup for my Paid Course Creator newsletter below. It’s free to signup.
PS: Let me know if that’s a lead magnet or a freemium offer in the comments 🙂
To your prosperity,
Kartvee