Strategy

The Economists Trick

By February 17, 2018 No Comments

Persuasive communication, giving people the illusion of choice

A couple of years ago The Economist had a strange offer for their magazine:

On-line version – $59
Print version – $125
Print & on-line version – $125

Now, the eagle eyed among you will spot that the print/print & on-line versions cost the same. So surely the print only version is redundant. Who is going to go for the print only option when they can get print and on-line for the same price?

Was it a mistake?

Surely a magazine of that calibre wouldn’t let a mistake like that happen….

No, it was done on purpose. And to test it they ran another version where they removed the seemingly redundant option.

This was the new offer:

On-line version – $59
Print & on-line version – $125

Here is how the sales figures broke down:

First offer with redundant option

On-line $59 (16%)
Print only (0%)
Print & on-line (84%)

Second offer with redundant option removed

On-line $59 (68%)
Print & on-line (32%)

So when the print only option is removed the sales got completely flipped around. But why? Why would this happen? Nobody bought the print only version so what difference does it make if it is not given as an option?

And the reason….
Contrast!
Consider this:
You decide to purchase The Economist magazine so you compare the purchasing options in the original offering (with redundant option). You look at the cost and you become distracted by the obvious choice – get the print and on-line version for the same price. It’s a no brainer! What 84% of people did not do is then compare the $125 price tag to the $59 price tag.

However when there were only two options:
Print $125
On-line $59

people then compared what they were given to compare and chose the cheaper option.
The supposedly redundant offer actual served an important purpose. It gave customers something to compare to. It is an ingenious way of putting a case forward for the more expensive option.

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