I'm sure as a photographer, you've heard you should always list your highest cost package first, but 𝙝𝙖𝙨 𝙖𝙣𝙮𝙤𝙣𝙚 𝙚𝙫𝙚𝙧 𝙩𝙤𝙡𝙙 𝙮𝙤𝙪 𝙬𝙝𝙮? What you haven't been told is that there's a very good reason behind this piece of advice. And it's basic human psychology.
Studies show that we have a very particular way in which we make a purchase decision. We heavily lean on the initial piece of information we receive as a point of reference when making a purchase decision that involves choice.
𝙏𝙝𝙚 𝙛𝙞𝙧𝙨𝙩 𝙥𝙖𝙘𝙠𝙖𝙜𝙚 𝙖 𝙥𝙚𝙧𝙨𝙤𝙣 𝙨𝙚𝙚𝙨 𝙞𝙣 𝙮𝙤𝙪𝙧 𝙞𝙣𝙫𝙚𝙨𝙩𝙢𝙚𝙣𝙩 𝙜𝙪𝙞𝙙𝙚 𝙗𝙚𝙘𝙤𝙢𝙚𝙨 𝙩𝙝𝙚𝙞𝙧 𝙥𝙤𝙞𝙣𝙩 𝙤𝙛 𝙧𝙚𝙛𝙚𝙧𝙚𝙣𝙘𝙚, 𝙣𝙤 𝙢𝙖𝙩𝙩𝙚𝙧 𝙬𝙝𝙖𝙩 𝙞𝙩 𝙞𝙨 𝙥𝙧𝙞𝙘𝙚𝙙 𝙖𝙩.
This point of reference is also known as a “price anchor.”
So, for example, maybe you’re shopping for a new host for your website. The first package presented as the price anchor is $700/year. It’s got everything you need plus more! Then you’re presented with the second package that’s $400/year. It’s got what you’ll need to get your website going and serve the needs of your business. It may not have many bells and whistles, but it’s got what you need. And in comparison to the top package, this feels like more of a reasonable investment and makes more sense, making you more likely to purchase this second package than if you hadn’t seen the first package at all.
The first number your client sees is their reference point and they make their investment decision based on that number. If you start with your lowest-priced package first, the increasing numbers don’t feel reasonable. They start to sting because the reference point didn’t set the bar high enough and it’s very unlikely that a purchase beyond your lowest package will ever be made.
Now that you know the "why" behind this common piece of advice, I hope the foundation to your business decisions is a bit stronger!
So, tell me! Did you know the reason you should list your highest cost package first before you found this post?
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