Sneaky Pricing

Matt McCormick


Pricing is one of the hardest things to get right for your business. I heard a story the other day of a business that implemented random pricing to pick the right one. On their pricing page, they had the system choose at random from a pre-determined list of prices. These price points ranged from $5 all the way up to $200. Keep in mind, this was all for the same product. After analysing the data, they decided to settle around $20.

It was a very interesting way of using technology to your advantage. Marketers always want to hit that price point where price x customers will provide the most revenue. This company was able to leverage technology to help them do that. It’s just another way in which the web can help your business in ways that can’t be done offline.

This is a post about another pricing strategy.

Recently I signed up for Safari Books Online. On their subscription page, they offer two choices - the unlimited Library at $42.99/month or the limited access bookshelf at $22.99/month.

I can read up to 10 books per month for $22.99. Being this is about half the price of a technical book, I thought it was a good deal and signed up.

Today I received an email with special holiday pricing. Sign up by the end of December and I could receive access to the Full Library for just $29.99 per month. Since it was just a little more, I checked it out to see if it was worth it.

When I came to the Change Subscription page, this is what I saw:

Notice anything different?

Now, they have a third option - the 5-slot Bookshelf for only $9.99/month. I imagine this option is for people who are considering cancelling their account. It is a way for them to keep their business by offering a reduced price for reduced services.

In my case though, their plan backfired. I was happily paying $22.99/month but since 5 books a month is plenty for me, I reduced my subscription.

In summary: Because of a marketing effort to get me to upgrade, I actually downgraded my account. I suppose the lesson is to be careful with pricing. It’s good to make an effort to keep customers but you don’t want happy customers paying less than they would have otherwise.