E-Commerce Optimization: Looks Matter
You’ve slaved over your product or service; you’ve done creative marketing campaigns that drove results; you’ve researched and established a fair price. Your job as an online marketer is done, right? Actually, you’re missing a key part of the conversion picture. Price presentation can have a huge impact on your conversion rate.
Price is Pain
Money is an artificial construct. Our distant ancestors lived without it. Survival depended on getting access to resources such as food, water, shelter and mating opportunities. All of these were scarce — once you used them up they were no longer available. Our society has created the notion of money and embedded it deeply into our cultural matrix. At the end of the day, however, money is just a convenient way for us to get access to the same kinds of resources as before.
Our brains don’t know any different, and use the same evolutionary machinery to evaluate spending. Money is viewed as an expenditure of important and finite resources. Let me put that another way: spending money is experienced by the same parts of the brain as feelings of physical pain.
As marketers, you have to minimize this perceived loss of resources symbolized by money. Fortunately, you have many tools at your disposal to accomplish this. There are a number of ways that you can manipulate an offer via framing and context, but this column will focus on the actual presentation of a single price that’s already been determined.
Since money is experienced as pain, we’ve come to strongly associate actual currency symbols with the anticipation of the pricing experience. Removing pricing symbols (see examples below) will lessen the pain associated with the number. This is why you often see high-end restaurant menus omitting dollar signs. If you can’t absolutely get rid of the symbol, then at least make it as tiny as possible. If it’s clear that the number represents a price, drop the currency symbol.
Length of Numerals
We all have a natural ability to judge sizes. This often leads us astray in the case of money, however. The actual length and complexity of numbers can make them seem more imposing. Which of the following looks like the larger amount?
Now, I don’t want you to give me the “logical” and considered response. I bet that your first-blush reaction was that the number on the left was higher. Of course it’s the same amount, but its physical appearance and length makes it look more imposing, and therefore somehow larger. Strip out extra characters (e.g., commas, periods) to make the price seem lower.
A similar idea applies to where price is positioned. When a retailer places the price within some kind of bounding shape, higher positioning makes us think of higher price. Placement at the bottom has the opposite effect. Therefore, lower the position of the price to decrease its perceived cost.
We’ve all heard of the “.99” effect — i.e., that ending the price in 99 cents or 97 cents or 95 cents makes a big difference. People have tested which of these is the most effective. The reality is that the conversion impact doesn’t depend too much on these less significant digits. Its power actually comes from changing the most significant leading digit. Our brains focus on the whole number before the decimal point, and will discount the part after it because of its position. Changing the leading digit can have a powerful effect on conversion.
This can be combined with a different representation of the fractional digits for maximum impact — i.e., to make them seem smaller and less important as well.
Leading Whole Number
A special case of changing the leading digit happens when you combine it with shortening the length of the price. By eliminating a whole digit, you make the number seem substantially smaller. Therefore, if you have the flexibility to adjust your price below such an important boundary, definitely do it. Changing the number of digits will make your price seem smaller.Chopping Down and Rolling Up
If the price itself is high, you can divide it to make it smaller by focusing on different scales (e.g., time or number of uses), then emphasize those numbers. For example, an annual subscription can be broken down into a cost per day, and a product into cost per use. Divide the price into smaller units to make it more appealing.
On the flip side, if you want to contrast your product vs. a higher-priced competitor, you can amplify it by aggregating the long-term or lifetime price difference. Roll up the difference in lifetime costs when comparing to higher-priced alternatives.
As you can see, our irrational subconscious minds are always looking for shortcuts. Therefore, what you thought was an objective element of your offer can easily be manipulated to maximize value and conversion rate. Appearances matter, so dress up your prices appropriately to make the cash register ring more often.
Tim Ash is the author of the bestselling book Landing Page Optimization, and CEO of SiteTuners. A computer scientist and cognitive scientist by education (his PhD studies were in Neural Networks and Artificial Intelligence), Tim has developed an expertise in user-centered design, persuasion and understanding online behavior, and landing page testing. In the mid-1990s he became one of the early pioneers in the discipline of website conversion rate optimization. Over the past 15 years, Tim has helped a number of major US and international brands to develop successful web-based initiatives. Companies like Google, Expedia, Kodak, eHarmony, Facebook, American Express, Canon, Nestle, Symantec, Intuit, AutoDesk and many others have benefitted from Tim's deep understanding and innovative perspective.
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