A recent study conducted in conjunction with the prestigious ECONOMIST magazine demonstrated the incredible power of decoy pricing. In an initial study, three packages were examined: Online subscription only – $59.00 Print subscription only – $125.00 Online and print combined – $125.00 Given these options, it was found that: 16% of the sample chose the […]

A recent study conducted in conjunction with the prestigious ECONOMIST magazine demonstrated the incredible power of decoy pricing. In an initial study, three packages were examined: Online subscription only – $59.00Print subscription only – $125.00Online and print combined – $125.00 Given these options, it was found that: 16% of the sample chose the online-only option for $59.00 (saving money)84% of the sample chose the online and offline combination for $125.00 (buying value) In the second round of the study, the options were: Online subscription only – $59.00Online and offline combination – $125.00 The findings were surprising: 68% selected the online-only option (saving money)32% chose the online and offline combination Taking out the third pricing option changed the outcome entirely, with purchasers being drawn to the cheaper option. This almost certainly cost The Economist margin. Pricing is never as simple as it seems. Decoy pricing and price anchoring are just some…