contrast pricing

How Contrast Pricing Makes us Spend More!

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Have you paid for a service or product recently? Did you have to choose from more than one option or plan from the same place? Did you go for the middle one? If the answer to one or all question is YES then chances are you practiced the principal of contrast pricing.

This post is for the people who want to know what contrast pricing is, how we all have practiced it, how business use it daily and what you can do make sure you do not fall for it.

What is contrast pricing?

Contrast pricing is a strategy used by many companies and businesses all around the world. In order to make the customer buy from them those establishments will have more than one choice for the customer.

This way you, the customer can contrast the options they have and choose what suits you but again you end up buying from the same place!

Many times there will be 3 options available, let’s call them A, B and C for the sake of this post.

A: Companies tend to present this option first and it is usually low-cost. (Silver/Basic)

B: This option usually costs more and comes in second place. (Standard/Gold)

C: The last option is many times too pricey! (Pro/Premium)

When we are presented with more than one option we immediately start comparing the cost to the initial item and evaluate which one has more value to us.

I should mention that those options can be reversed for a more effective contrast pricing. Sometimes companies might have a FREE option which is very limited and not that appealing but it is there for a reason.

Choosing a Free service will get you to try it, see how limited it is and hopefully upgrade.

How does contrast pricing work?

This strategy is actually based on psychology. When we are presented with one option we tend to just not go for it, our brain automatically starts questioning if we really need it.

On the other hand, when the same place offers a second or even better a third option we start to compare those options and get to chose one! Think of these options like Silver, Gold, and Premium. Sometimes they might be seen as Basic, Standard, and Pro but the idea is the same!

I am sure you have heard and seen these option at some point even today!

Many subscription based services use them as well and it works! Think about it, how many times have you gone for the gold or standard one?

Below you can check an example of Google’s One Storage packages where they use the contrasting price principal in action!

contrast pricing for google one storage
one.google.com

Do you notice how the FREE plan is very limited, this right away makes us compare it with their RECOMMENDED plan. I am sure you think it offers more value and you are right. However, if you are not a professional or an expert who really needs that much storage (100 GB!!! who needs that much for personal use?) you don’t really need this plan.

Be honest you did consider getting the RECOMMENDED plan, didn’t you?

That my friend is the magic of contrast pricing!

" If you don't use CONTRAST, Everything seems Expensive or Cheap" – Peter Thomson Click To Tweet

How do businesses benefit from this strategy?

What businesses aim with this is to get the majority of the people to get the one they really want to sell. Can you guess which option they really end up selling?

That’s right, B. Did you know that 60 % of people decide to go with option B, the one that sounds logically priced and it offers some more features than the limited option A. It is not too cheap nor extremely expensive and therefore more people get it. 20 % go for option A and the rest 20% choose option C.

This scenario is based on a 3 option service plan! Even if you see 2 or 4 options like the plan above it still works the same way. People still get to compare 2,3, or 4 different options and get to choose most likely the 2nd one.

So what do we conclude from contrast pricing strategy?

All of the options sell! Businesses end up with huge amounts of revenue from a strategy like this!

Even the Premium/Pro one have an audience and to be honest I have too fallen prey to this strategy! The truth is that even if a price is too much for some, the same price might be just right for others.

I always say ” If there wasn’t any people spending ridiculous amounts of money, there wouldn’t be a market for those products or services”. Yes, I know good things are not cheap but I think there are ways how to go around spending that much. Most of the times we don’t really need to.

How to avoid getting tricked by contrast pricing?

There are some things you can do to make sure that you genuinely want to get the service or product. Consider asking yourself the questions below:

  • Do I really really need that product or service?
  • How is this product or service going to be beneficial to me?
  • Does the product or service really deserve the price?
  • Are there better prices out there?
  • Is the business legitimate?
  • Do I have the budget to spend on this?

When was the last time you were unintentionally contrast pricing? Have you used or do you know anyone that is using this strategy? What do you think of contrast pricing? Let me know in the comments!

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35 thoughts on “How Contrast Pricing Makes us Spend More!”

  1. I used to be in sales and we were trained to use this technique. On the one hand it is nice to know the value of different options, but it’s definitely meant to make us spend more!

    1. Hi, Alison!
      I agree that knowing the value of different options is good for the customer but we need to be aware of those techniques and always have them in the back of our minds!
      Thank you for commenting. Stay in touch!

  2. I just went through this with choosing a web hosting service! I almost made the mistake of picking an alternative plan with the same company, which was more expensive and had more options than I required, but instead I did my research to find what actually suited me best. Great post!

    1. Hey, Dee!

      I am so happy you didn’t fall for the trap. A bit of research can be time consuming but so rewarding and you get to learn a thing or two! Great job on choosing the plan that suited you best! Good luck with the host service! I can’t wait to see it live!
      Thank you for your kind words. Stay in touch.

    1. Hey, Kris!

      I am so happy you loved it! Learning on a daily basis is something I always try to do, I think it keeps my spirit young 😊.
      Thank you for your kind words.

  3. A lot of businesses seem to hide there free option, so you click to see the free option but only get the paid price plans. Then some tiny hyperlink hidden in a load of text will take you to the free option. I really dislike tactics like that

    1. Hey,
      You are totally right. It can get frustrating to find the free option. It kind of puts the customer off, let alone the satisfaction overall. Some businesses don’t know how to utilize the free option in order to bring more lead and future paid customers.
      Thank you for visiting, stay in touch

  4. I have noticed this pricing model on a lot of products and services recently. I always ask myself whether I really need something or not (and often decide that I don’t), but I can see how easy it is to think you are getting a deal when you choose a lower priced option.

    1. Hi, Brooke!

      The strategy you use will definitely help you not fall for that. Contrast pricing is made to make us spend and knowing how to be cautious is crutial. Thank you for commenting, stay safe.

    1. Hey, Kelly.
      I am so happy you found my post interesting. Yeah, haven’t we all! I doubt there is a person who can say they have never been in the situation where they had to compare prices and chose the more logical one.
      Thank you for stopping by

  5. This has always been so fascinating to me. I studied psychology, and I remember watching a video on this and how businesses price options and how people in the real world respond to these. It’s amazing how our perception can persuade us so much!

    1. Hi, Kalin.

      The brain is a tricky thing. It is so easy to get persuaded to believe in something. All it needs is a consistent reminder of a particular thing and boom. We tend to believe we are or need something. Unfortunately companies use these strategy as well. I believe more people should be aware of it. Thank you for visiting and commenting. Stay in touch.

  6. Very insightful post. It is great to know the tricks marketers are using to get us to spend more. Thanks for showing the questions to ask next time we are posed with these options.

    1. Hey, Oliver.
      There are so many tricks being applied without us even knowing. I am so glad my post was useful. Thank you for stopping by.
      Stay in touch

  7. Hi Darina, great article – many thanks for putting it together 🙂 I always struggle with this and am (as so many) drawn to the middle pricing. I really like your suggestions and am going to use them next time I buy something! I like to look for hidden costs too. Many thanks again.

    1. Hello, Michelle.
      You are so right about the questions. They have saved me form spending numerous times. I hope they do the same for you. Thank you for visiting, stay in touch.

    1. Hi, Mike.
      You are not alone. Many people don’t know of it and this is what companies count on. It is amazing how they use this strategy. I hope this post helps you from getting tricked into spending for things you might not need. Thank you for visiting and stay in touch.

    1. Hi, Jimmy.
      I agree. Companies should not be allowed to use psychological strategies to convince people of doing something. The fact that you don’t fall for it is great. Stay in touch.

  8. Certainly a lot of products have contrast pricing especially with softwares or online tool. Non experts usually fall into prey as you’ve mentioned we initially want more features and all. But maybe we don’t need them all. A research can save extra costs 😉

    1. Hey, Vinn.
      You are so right, these options are all around us. It is very difficult to spot if you are not aware of what contrast pricing is. Simple questions and research can save you plenty of 💰. Thank you for stopping by. Stay in touch.

  9. Thank you for this post, it’s definitely very helpful to understand how companies use techniques to get us to buy more, especially in a climate where people are likely to be keeping a close eye on their budgets!

    1. Hey, Summer.
      Times are hard, we should be extra vigilant with our spending and avoid getting tricked. Those strategies are created to make us spend more even if we don’t need to. I am so happy you found this post helpful. Thank you for stopping by. Stay safe.

  10. Such a tricky thing pricing! I worked in SaaS for years.. it’s so important to get your pricing right, but as a consumer, I hate it when they hide the free options!

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