Strikethrough/cross-out pricing definition
Strikethrough pricing is a marketing strategy used to highlight how much customers can save on a product. The original price of the product is crossed out and replaced with the discounted price next to it.
What is strikethrough pricing?
Strikethrough pricing is a visual representation of the original price of a product and then the discounted price next to it. Today, we see strikethrough pricing in a lot of ecommerce sites and apps, especially for products that get heavily discounted regularly.
Strikethrough pricing works well for impulse purchases or time-sensitive purchases because it highlights what you're saving by buying now.
What is a good example of strikethrough pricing?
A good example is Amazon's Lightning Deals page. This page shows products that are heavily discounted for a limited period of time. The product price is crossed out and you see the percentage discount below it (e.g., 60% off). We can infer that the current price won't last forever—it will be going back up after the sale ends!
What is the psychology behind strikethrough pricing?
Anchoring effect: The first price you see has an effect on how you feel about the subsequent prices.
Price comparison: If your original price is high, it will seem like a good deal when the actual price is lowered. If your original price is low, then lowering it will seem like a bad deal.
What is the "anchoring effect" and how does it work for strikethrough pricing?
One potential reason for its popularity is based on the "anchoring effect." This refers to how people rely on an initial piece of information to make future judgments. The original price acts as an anchor that shoppers use when evaluating the discounted price. For example, if you’re offered a $50 product at a 20% discount, your immediate thought might be that it’s worth around $40 (or just under). If you were then offered another 20% discount, even though there was no change in the actual price or quality of the product, many shoppers would still see this as a good deal because it brings us closer to our original anchor ($40).
When does strikethrough pricing work?
Strikethrough/cross-out pricing is a marketing tactic that uses the visual similarity between strikethrough text and crossed-out text to draw attention to the price discount. It can be used in any industry, but is most common in retail.
The strikethrough/cross-out pricing works well when the sale prices are low to medium-high, but if they're too low, it diminishes their credibility and may even turn off customers who see it as an attempt at manipulation. It's also less effective with consumers familiar with the product — and for luxury brands it can be a complete no-no.
Who should I target with strikethrough pricing?
Ultimately, you have to understand your target audience and their habits when deciding whether or not to use cross-out pricing. For example, you might use it to appeal to impulse buyers or time-sensitive shoppers, but not when your product appeals more to bargain hunters who will compare prices anyway.
Striketrough pricing is a good option if you're selling discounted products and want to highlight the original price while still conveying the sense of urgency that comes with a sale. It's also effective for impulse buyers who don't want to spend too much time comparing prices or doing research before making their purchase decision.
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