Divide and conquer
Price may be presented as a single annual amount, or a monthly or daily sum. Irrationally, presenting the daily sum can create a lower price perception.
Price $360 per year | Index 100 |
Price $30 per month | Index 300 |
Price $1 per day | Index 1,000 |
Marn, Roegner and Zawada (2004) give an instance where a term insurance provider offered options like those above. Quoting monthly amounts resulted in three times higher take-up and daily sums were ten times more popular. This held true even when the actual payments were made every 180 days for all the options.
Action: Consider the duration of the experience and check ways to represent the total price as a daily rate or a fractional amount. ...
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