in Pricing

The Value Of Emotional Pricing

Dear friend & reader,

There is one thing you can do right now which will boost your conversion rate. It is almost guaranteed. It taps into the basic human nature and I’ve used it successfully both for myself and for others.

It is simple – add bonuses to your offer.

When it comes to sales, bonuses alone won’t sell your product. However, bonuses are directly correlated with your closing rate, in other words, decisions to buy. The more you add of them, the more valuable they are to your market, the easier you are going to close the sale.

This is because we, as people, love getting free stuff. We like to pay for something and get something extra. This is present everywhere – be it that we get a Cola with our burger, headsets with our new iPhone or a free dinner at a fancy restaurant when you participate to a workshop.

We don’t really see bonuses for what they are, part of the offer, no matter how obvious it is. When someone flies first class, he doesn’t see the limo that it was sent to him, the free food, the access to the lounge as something he paid for, but rather, as bonuses that are given to him for free. I know that in the end it feels just like a difference in semantics but it is very important. When you sell something and add all these three things, everything that is extra is considered to be a gift and we simply love gifts.

I’ve seen this story repeat itself again and again. I’ve seen how a seminar that was struggling to fill the seats added a set of books as a bonus and it sold out. I’ve seen how this consultant was getting a lot of interested leads but no sales until he added a free two hour strategy session with every purchase over $497. I’m a sucker for bonuses too, as I’ve bought many products just because I was getting something free. As a copywriter, I must tell you, it is not uncommon for people to buy for what you’re offering extra and to not care about your main offer at all.

Bonuses tie up to the idea of perceived value but before we go there, let’s have a short talk about value. Value is a concept that is misunderstood by most people. Value is not price. Value is not tangible for most businesses. A kilogram of gold has a tangible value based on exchange rates but a seminar, a workshop, an information product, a coaching session does not. So in a way, value is just how much that given product benefits the prospect.

Here is where it gets complicated. That value is relative and if you understand this, you’ll understand one of the most important lessons in marketing. For this, I want to introduce you to Mary. Mary is a young lady in her mid 20s. She’s getting married in eight months. Now, she’s preparing for it. She already knows where she’s going to have her wedding and even the name of the band that is going to sing. She is starting to prepare the invitations and going through all the motions for one of the happiest day in her life.

Mary also found her wedding dress. It is perfect. There’s a problem though … in the last year she put a few pounds overweight and while the dress is wonderful, her body is not quite in the shape required to wear it. Of course, she could compromise but that’s a day everyone will remember. She’s going to keep those photos for the rest of her life. She’s going to accept nothing but looking simply amazing. She wants to make everyone turn heads after her and she’s afraid that her friends will gossip behind her back of how her body is a bit chubby.

She has eight months to lose 20 pounds.

Now, how much do you think is a solution to lose 20 pounds worth to Mary? $10? $100? $500? $1000? The truth is … a lot. Thousands of dollars potentially, if she can afford it. This is because she’s not buying weight loss or a personal trainer or a gym membership. She’s buying the image of her looking simply amazing at her wedding and relief from the anxiety that people are going to judge her. The perceived value of a solution that (1) delivers on the benefit (2) is trustworthy is huge.

Now let’s imagine Ana doesn’t have a wedding. Actually, she’s very comfortable with who she is. She knows that she needs to lose weight but she’s not really stressed about it. Will Ana still pay $5000? Or $1000? Or even $500? Not really. The problem is the same – overweight, in need to lose the weight but the perceived value is so much lower.

Same product, same problem, yet, two different value perceptions. Good marketers sell like Mary. They’ll sell to people that are very aware of the need to fix this problem and are willing to take action fast at a high cost. Mediocre marketers sell to people like Ana who doesn’t really care if she changes or not. You know to whom you should sell. You should sell to the people for which what you are doing is a huge perceived value and that are going to see everything you give them as a blessing.

What does this have to do with the idea of bonuses?

There is a buying temperature for every person. This has to do with their problems, the urgency and the value you’re offering. When you’re offering enough in perceived value, they’ll see this as a good deal. It is like a scale. The less urgent and painful the problem it is for them, the more you need to pile up value in the form of bonuses for them to buy. Since most of your market is not going to feel desperate to find a solution now, you use bonuses to create that buying temperature. You compensate for their lack of urgency and skepticism to spend money by piling up value that they’re getting when working with you.

Let me put it this way. If you are in pain, do you need bonuses from your doctor to actually go take action? No, the pain itself is the motivator. If you’re in discomfort though, you may or you may not go. This is where the bonuses come, to compensate for the lack of pain, for the lack of urgent need by providing with tangible and intangible value.

The psychology of this goes deeper, into how the brain functions, that we like to hoard things, that we all want to feel we’ve got a great deal but the essence is this – when someone is interested but not convinced in buying, the best way to push towards the sale is to pile up bonuses. These bonuses generally must be something that is very easy for you to provide and it creates massive value for the other person (eBooks, courses, videos, etc – but not your time, as you’d just cut into your ROI and devalue your service) and are used to push from “that’s nice” to “I want it”. You can’t make someone buy your product if there’s no pain and interest by using bonuses, you can use them only to close the final 100 yards between “I’m not sure I want to buy this” to “where do I pay?”.

Ideally, in a sales material or in a sales presentation, you keep the bonuses at the end. It is win – win. If he agrees to buy without bonuses, then you’ll give him a surprise and he’ll feel like you’ve over-delivered. If he doesn’t want to buy or he’s skeptical, you’ll use the bonuses to get him to commit. If you add the bonuses in the beginning, you’ll just make him feel like this is the value of the product itself, leaving you with no tools for a strong close.

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Have you’ve found this useful? Then let’s have a talk. As a copywriter and marketing consultant, I’m helping you sell to more customers, more often, for higher values. Let’s have a complimentary 30 minute Skype call in which I can understand where you stand right now – business wise and to see how I can help you.

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Best regards,
Razvan Rogoz
The Self Improvement Copywriter