What's your name?
- What is the correct price for a pair of running shoes?
- How much is too much for daycare?
How to think about price justification
Buyers don’t have answers to these questions. They just guess them. And often, our guesses are wrong.
This leaves the retailer vulnerable because now external factors can massively influence my sales. If this visitor is coming to my site after looking at an inferior product they will get a sticker shock when they see my product, even though mine is objectively better.
Think about it from the buyer’s perspective
It’s important to understand how people search online. This GIF is a good example:
Few things stand out:
- They did a search and opened multiple tabs.
- They spent very little time per tab.
And if shoppers are moving around so fast guess what the deciding factor is? It’s the price. But as we saw above, price isn’t the best indicator of quality.
As marketers, we need to justify price.
What does it mean to justify price?
When shoppers are looking for a new solution they are aiming for value for money. And value for money has 2 opposing components: price and quality.
Typically, when price is low quality is being sacrificed. And when quality is impeccable price is at a premium. Think of it as a seesaw.
The marketer is trying to get it perfectly balanced. We need site visitors to know we’ve cracked the code on balancing price and quality.
What happens when the price isn’t justified
System 1 will take over, shoppers will become shortsighted and leave your site.
What do to if you are selling a premium product?
If you are selling a premium product you are investing in quality and this means your price will be higher. But a higher price activates a negative emotional response in the mind of our prospect. So what is a marketer to do?
Price justification example
Ora Organic (not a client) sells a vegan vitamin D supplement. Here is their page:
It’s really well designed and we’re sure it’s working for 80% of visitors. But in order to improve conversions, we shouldn’t think about the 80% that are converting, we should think about the 20% that aren’t.
Think about the minority
We need to think about all the reasons why these 20% didn’t buy. One reason someone may have decided against buying is that they feel $16.99 is too much money for a supplement. A quick Google search reveals vitamin D supplements are available for less online. So if this is a potential pushback it’s our job to address the elephant in the room.
Price justification solution
Here is what we would have done on ora.organic. In the screenshot below, you’ll notice we added a Quality Matters link and placed it immediately to the right of the price point. This was done because users who have questions about price usually have it when they see the price tag so we wanted the answer to be nearby:
And when the link is clicked here is the price justification popup message:
Is this the best popup message? Probably not. And this is why we would A/B test 20 versions till we get it totally dialed in.
But the bigger point is this. If …
- A high percentage of page visitors click the Quality Matters link it’s a signal that that’s a question people are having.
- Very few click Quality Matters link it might suggest the price wasn’t a concern in the first place.
- People who click Quality Matters and read our message convert it means we’ve nailed it.
- People read the popup explanation and don’t covert it means our explanation wasn’t convincing. But that’s ok because we’ll keep on tweaking the message till all that’s left is a sequence of words that just works.
One more Price Justification example
This one is for the company SodaStream.
Opposite end of the spectrum
So we’ve seen how to fix the problem if you are selling a premium item with a hefty ticket price. The opposite can also be a problem: where you are giving an incredible discount and the shopper thinks of it as “too good to be true”. To see 2 examples of this read this article: Good Discounting and Deep Discounting.
Interested in more buyer psychology and copywriting nuggets?
We’ve spent the last 12 years thinking about one question, “what small tweaks can we make to improve conversions 10%?”
We’ve had amazing insights. You can learn more about them on our Frictionless Commerce homepage.