A pricing strategy where a high-priced option is introduced first to set a reference point, making other options seem more attractive in comparison. Important for shaping user perceptions of value and creating a benchmark for other pricing options.
The phenomenon where higher-priced products are perceived to be of higher quality, regardless of the actual quality. Useful for understanding consumer perceptions and designing effective pricing strategies.
A pricing strategy that offers a middle option with substantial value at a moderate price, often perceived as the best deal by users. Useful for driving sales by presenting a balanced choice that appears more attractive relative to higher and lower-priced options.
A strategy where an additional, less attractive option is introduced to make other pricing options look more appealing, often steering customers towards a particular choice. Important for guiding user decisions and increasing the perceived value of targeted pricing tiers.
An economic theory that explains why some necessities, such as water, are less expensive than non-essentials, like diamonds, despite their greater utility. Useful for understanding consumer behavior and designing pricing strategies.
A cognitive bias where individuals evaluate the value of bundled items differently than they would if the items were evaluated separately. Important for understanding user behavior and designing effective product bundles and pricing strategies.
A phenomenon where people perceive an item as more valuable when it is free, leading to an increased likelihood of choosing the free item over a discounted one. Important for understanding consumer behavior and designing effective marketing strategies.
A cognitive bias where people ascribe more value to things merely because they own them. Useful for understanding user attachment and designing persuasive experiences.
A concept in behavioral economics that describes how future benefits are perceived as less valuable than immediate ones. Important for understanding user preferences and designing experiences that account for time-based value perceptions.
Anchoring (also known as Focalism) is a cognitive bias where individuals rely heavily on the first piece of information (the "anchor") when making decisions. Crucial for understanding and mitigating initial information's impact on user decision-making processes.
A cognitive bias where individuals evaluate outcomes relative to a reference point rather than on an absolute scale. Essential for understanding decision-making and consumer behavior.
Lifetime Value (LTV) is a metric that estimates the total revenue a business can expect from a single customer account throughout their relationship. Crucial for informing customer acquisition strategies, retention efforts, and overall business planning by providing insights into long-term customer profitability.