THE ROI GUY SAYS: MAKE THE PRICE MATTER!
Hi, Richard Seppala, your ROI Guy here. In my new article, “Proper Pricing is Paramount,” I write about two new studies about discounting and how to make it have more impact.
The first study made it clear that offering a new product or service for free when another existing product or service is purchased doesn’t work for most people. They tend to see the new product as being worthless – they don’t really know what it is and if you’re giving it away, then, hey, can’t be worth much, can it?
One suggestion I gave was making the existing product free – and charging for the new product. That way, consumers see the value in getting something they already know and like for nothing.
But another point in the study was that if you bundle the package together at the same price – but don’t tag one of the products or services as “free” – that can also be effective in improving your marketing campaign ROI. Consumers, in this case, just see an overall great value and aren’t forced to look at the new product as possibly being worthless. Which is always a good thing!
The second study I wrote about had to do with “Opportunity Costs.” Simply put, it’s confronting the customer, client or patient with the fact that if they spend too much on one thing, they won’t have enough to spend on another thing they might want more.
The awesome example I cited was an IKEA ad showing just how many more shoes a woman could buy if she bought an affordable IKEA cabinet instead of an expensive one.
Again, there’s another – and just as effective – way to approach “Opportunity Costs” in your marketing. An experiment the researchers did was to offer people a choice between a 16GB iPod Touch and a 32GB iPod Touch. The number of people who chose the 16 gig model doubled when the researchers said that choosing the cheaper model would “leave you $100 in cash.”
Just saying 10 or 20% off – at a time when huge discounts are commonplace, thanks to the economy – may not be enough. You can increase your ROI with marketing by bringing home what that discount really means to their everyday lives – either by having more cash on hand or by being able to buy something they really want.
The sure way to improve marketing ROI is by communicating as effectively as possible in your advertising. By presenting discounts and freebies properly, you make the most of them. You’re only offering these kinds of deals to get more business – so do the little special tweaks to how you offer them to ensure they have the biggest impact with the people you’re marketing to.
Until next time, I’m Richard Seppala, The ROI Guy – hoping your ROI is all good! Don’t forget to stop by www.yourROIguy.com for the latest on how to measure and increase your ROI!
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