5 science-backed pricing tips from the U.K.’s top marketing podcast In 2007, Coulter and Coulter showed two advertisements to two random groups of customers. Each advertised £10 discounts on flights to Turkey. One listed the tickets at £188. The other showed a higher price: £233. Customers found that the cheaper tickets felt like a worse value. Why? Researchers found that people more easily differentiate smaller numbers. The difference between 4 and 3 seems more salient than 9 and 8. So, customers were more likely to buy when the prices ended in smaller numbers £244 to £233), compared to those ending in higher digits (£199 to £188). The takeaway is fairly simple. Next time you run a discount, make the sale price less than five. That’s just one piece of pricing advice that we’ve discussed on my podcast Nudge, the U.K.’s number one marketing podcast. Here are four more psychology-backed tips for pricing your products. Table of Contents Break down your price. Show the price difference. Be transparent with your costs. Make the difference visible. Break down your price. Check out the two ads for a budget lunch from Huel. One shows the total cost of 21 meals (£78.96). The other breaks down the price per lunch ($3.76). Researchers found that breaking down the price per unit performed better with customers. Showing a lower price led shoppers to perceive that they were getting a better deal. Richard Shotton and Michael Aaron...

This behavioral science principle can make your billboard go viral, here’s how Is billboard advertising still relevant today? Yes, all because of costly signaling. This behavioral science principle states that expensive signals indicate higher quality or status. Although a broader concept about human behavior, costly signaling absolutely applies to advertising. What, after all, is the value of a social media ad? While highly effective, social ads are cheap, so everyone can buy them and crowd the space. But a billboard? That takes some real money. So, let’s dive into how the costly signaling applies specifically to billboard advertising. Then, I’ll share some top viral billboard examples. What is costly signaling? Costly signaling theory is the idea that the higher cost you put into something, the more other people will value it. Sounds simple right? Well, I do have two caveats. The first is that costly signaling reflects perceived cost. People still need to interpret and assign value to signaled information. Secondly, the signal of cost in these cases is reliable because only individuals who can afford to send the signal possess the signaled quality. To put it in marketing terms, costly signaling means that the more resources you put into sharing your message, the higher people will rate it. Goes beyond money and includes time, effort, pain, or any sort of expense spent to make the message more persuasive. I think advertising executive Rory Sutherland puts it perfectly: “The meaning and significance attached to something is in direct...

Six simple behavioral science tips to improve any marketing message (and the brands that get it right) Do you ever look at an ad and wonder, “What on earth does that mean?” That’s how I felt after viewing this Stripe ad. Source Now, I love Stripe. Their product is tremendous in the world of payment processing, but this ad makes no sense. Not only is it confusing, but it’s missing all the elements that I think make for a good ad. The ad needs a refresh, and behavioral science can help. Since starting the Nudge podcast, I’ve regularly interviewed researchers and other experts in order to glean insights from psychology and apply them to marketing. And over the past decade, I’ve come to believe that almost every message could be improved by behavioral science. In this post, I've collected six successful messages with behavioral science principles behind them to prove my point. Once you see the science — and understand exactly why these ads work — using the same strategies to improve your own marketing messages becomes much simpler. Six Successful Messages Using Behavioral Science Principles 1. Anchoring — De Beers In the 1930s, only 10% of Americans bought diamond engagement rings. Most bought cheaper gems, spending a smaller proportion of their disposable incomes. To change buyer behavior, De Beers came up with a new anchor. They asked, "How can you make two months' salary last forever?" Two months' salary was not the standard amount to spend...

Input Bias and How to Compete When the Best Marketer Is AI, What We Know From Psychology Welcome to Creator Columns, where we bring expert HubSpot Creator voices to the Blogs that inspire and help you grow better. In his book The Coming Wave, Mustafa Suleyman predicts that AI will be able to successfully build a business in a few years. You would just need to write a prompt like, “Go make $1 million on Amazon in a few months with just a $100,000 investment.” How? Well, Suleyman says, AI could research trends online, find what sells on Amazon, generate images of products, and send them to manufacturers on Alibaba. AI could then “email back and forth to refine the requirements … and continually update marketing materials and product designs based on buyer feedback,” Suleyman writes. In other words, it’ll make my job in marketing (and most roles in business) irrelevant. This leaves those of us who work at companies big and small in crisis. What will we do? Why would businesses need marketers if an AI can make $1 million on Amazon without human assistance? Soon, I’d become like the London gaslighters of the 1800s or the doormen of the 1900s — unnecessary and redundant. Except, I think there is a get-out-of-jail-free card. I think there is a way for me to remain relevant in a world where the best marketer is an AI. Looking to Stay Relevant? Leverage Input Bias So, what’s the secret to staying relevant?...