The Invaluable $1.80 Beer Lesson on Selling Products and Buying Habits
“The great bear experiment
People were offered two beers–a premium one at $2.50 and a bargain beer for $1.80. … About 80 percent chose the more expensive one.
In the next experiment, an even cheaper option joined the first two–a beer for just $1.60. … 80 percent of people nabbed what became the middle option–at $1.80–and the rest bought the $2.50 offering.
Then the third take happened: the $1.60 beer was switched out for one of those ultra-premium offerings at a cool $3.40. … most people chose the $2.50 option, relatively few chose the low-cost $1.80 option, and about 10 percent nabbed the most expensive option.
… Shifting the options influenced buyer behavior. The experiment confirms an old sales heuristic: if you offer different price points, people will choose between the plans rather than whether to buy the product or not. …
… The most obvious application would be to incorporate the three-way price-plan into your product … use the strategy on your friends and colleagues. … say you want to grab lunch with your work BFF but you don’t want to boss them into going to your favorite Cuban place–you’d rather allow them to arrive to that decision on their own.
… suggest three lunch spots: cheap and average Italian, reasonably priced and conveniently located Cuban, or distant and expensive Chinese. So instead of contemplating the worthiness of Cuban in and of itself, your BFF is comparing it to the crap Italian and the too-fancy Chinese, which should tip the lunch-scales in your favor–if that beer experiment was any indication.”