4. Reframe the price

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4. Reframe the price

The other day, my uncle who is a banker in a Public Sector Bank (PSB), wanted to enroll her daughter in an IIT online coaching class and was asking me to evaluate different online platforms.

He asked me to find the price of courses online. When I mentioned that it would cost 56,000 for a 2-year program, he was taken aback by how commercialized education has become over the years.

Instantly, my aunt grabbed my phone and popped it into the screen. It isn’t too much! Just 2,333 rupees per month. Uncle’s mood changed suddenly (although they were paying the same 56,000 lump-sum) and he was elated enough to say — phir toh theek hai! 🙏

Using monthly estimates is an effective hack to show a higher ticket price offering as it encourages customers to make a buying decision faster for two reasons:-

  1. We often get paid monthly. We pay our rent or loan monthly. It creates a familiarity in our cognitive space.**

  2. Since the monthly amount is smaller, it may feel more affordable. It seems manageable. Interestingly, a neuro-imaging study published by Human Brain Mapping found that higher prices actually activate neural circuits involved with anticipating loss.

Re-framing the price to a perceived lower denomination works well for selling non-luxury consumer products in countries like India where median household income is not high. It helps the customers to make guilt-free decisions faster. 👊

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