Latest / The Pricing Marketing Podcast with Fexingo: Price Anchoring, Bundling, and Conversion Pricing
The Decoy Effect And Your Monthly Subscription
We dissect how the classic decoy effect, famously demonstrated by Dan Ariely with The Economist subscription tiers, continues to drive modern SaaS revenue. Today we look at a specific B2B software company that introduced a 'decoy' mid-tier not to sell it, but to make their premium plan look like the obvious choice. You will learn why the middle option is often priced slightly higher than the top tier in perceived value, and how this psychological trap increases average contract value without increasing customer acquisition costs. We also explore how payment friction interacts with…
The skinny
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