Day# 141: The behavioral science behind pricing

Day# 141: The behavioral science behind pricing

Hi everyone so for today I then wanted to look more into the psychology behind pricing, a concept that I played with when designing menus at one of the previous companies I worked at. I also worked at an online gambling company where specific gaming promos would do better than others and it really made me wonder how exactly does pricing work. Check out this really interesting article, it is a semi long read but certainly worth it! The article discusses price theories and methods to influence behavior of users. Something that stood out for me was the discount process, for example that users saw a deal being worth more if it had a % value discount over an actual $ value. For this I refer to this article   


In this article they explain the Rule of 100 very clearly

“The Rule of 100 says that under 100, percentage discounts seem larger than absolute ones.  But over 100, things reverse. Over 100, absolute discounts seem larger than percentage ones.”

This would actually be an interesting A/B test that could be carried out. Design and copy as well possible CTA’s to be in the same places and just the method of indicating the discount to be changed for different groups of users. Many organisations have tested like this already however often this is what UX is and companies will want to see the difference to believe that it benefits them. The article  includes interesting examples of how A/B tests were performed to identify if the rule of 100 was accurate in its estimations of human behavior and perceptions of pricing. Very interesting how the rule of 100 was confirmed correct yet again and it resulted in increased revenues as well. The article also discusses how sizing can affect one’s perception. The video below is a short display of how one company uses social proof and triggers for online shoppers


There are some other mechanisms and constructs that also influence pricing on the Online platform, and I thought I would include some extra reading material see below.

Before I end off, I wanted to mention I know these theories can bring about a lot of controversy when it comes to ethical UX and dark patterns etc. However I am going to go through everything I have learned, and then will try unpack what I think is to manipulative, at the end of the day these are still my opinions and it does depends on the industry, the company you work for, regulations on the product that may exist, as well as your personal choices. Happy researching until next time!

Bye for now!

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