I just received a $35 prepaid card from my dog’s prescription provider. Whoo hoo — it felt like free money — until I remembered that I already paid $335 for the drugs. The same momentary euphoria occurs when retailers like Menards or appliance companies send rebate checks — our brains don’t process the “rebate” part and it feels like a bonus.
Of course, the pricing structure of these companies has been intentionally structured for that exact reaction. I would have still been grumbling if my dog’s drugs were $300 instead of $335 but this way, there is at least a positive moment around the transaction. It’s the same with college tuition, discounted by financial aid — people feel better about receiving a scholarship instead of paying a lower full price, even though the bottom line is the same.
Think about how you price or offer what you provide. Would you be better served by increasing the cost and delivering a bonus on the back end, either as a rebate or a surprise perk? Could you benefit from implementing a strategy that allows for instant rebates instead of delayed rewards? Or, perhaps offering a loyalty program with rewards that reduce the overall outlay over time may be the best route for you.
Pricing isn’t just about the revenue it brings in; it’s about the perceived value your customers have and how they feel about what you are offering. Providing a bonus may help you with both.