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.
A pricing strategy where a core product is sold at a low price, but complementary products are sold at higher prices. Useful for designing pricing strategies that maximize revenue from complementary products.
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.
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.
The four key elements of marketing: Product, Price, Place, and Promotion, used to develop marketing strategies. Important for creating comprehensive marketing strategies that effectively promote digital products.
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.
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 are less likely to spend large denominations of money compared to an equivalent amount in smaller denominations. Useful for designers to understand consumer behavior and design pricing strategies that consider spending biases.
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.
The process where design services and outputs become standardized and interchangeable, often leading to competition based primarily on price rather than quality or creativity. Important for understanding market trends and pressures that reduce the perceived value and uniqueness of design work, impacting pricing and differentiation strategies.
Cost Per Click (CPC) is an online advertising model where the advertiser pays each time a user clicks on their ad. This model is crucial for measuring and optimizing the effectiveness of online advertising campaigns.
A dark pattern where practices are used to make it hard for users to compare prices with other options. It's essential to avoid this tactic and promote fair competition by allowing users to make informed decisions.
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.
A strategic research process that involves evaluating competitors' products, services, and market positions to identify opportunities and threats. Essential for informing product strategy, differentiating offerings, and gaining a competitive advantage in the market.
Cost Per Action (CPA) is an online advertising pricing model where the advertiser pays for a specified action, such as a sale or registration. This model is crucial for optimizing ad spend and measuring marketing effectiveness.
Cost Per Objective Option (CPOO) is a metric used to measure the cost efficiency of different marketing options based on achieving specific objectives. This metric is crucial for optimizing marketing spend and measuring campaign effectiveness.
A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known. Crucial for understanding decision-making under risk and designing systems that align with user behavior.
Bottom of Funnel (BoFu) refers to the stage in the sales funnel where prospects are close to making a purchase decision. Important for tailoring marketing and sales efforts to convert leads into customers.
A cognitive bias where consumers change their preference between two options when presented with a third, less attractive option. Useful for designers to create choice architectures that effectively influence user decisions.
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.
The financial performance of a product, measured by its ability to generate revenue and profit relative to its costs and expenses. Important for assessing the financial success of a product and making informed business decisions.
Monthly Recurring Revenue (MRR) is a metric that quantifies the predictable revenue generated each month from customers. This metric is crucial for SaaS companies to track financial health and growth.
A cognitive bias where people ascribe more value to things merely because they own them. Useful for understanding user attachment and designing persuasive experiences.
The psychological discomfort experienced when parting with money, influenced by the payment method and context. Crucial for understanding spending behavior and designing payment systems that mitigate discomfort.
The value a brand adds to a product or service beyond the functional benefits, encompassing factors like brand awareness, perceived quality, and customer loyalty. Crucial for understanding the long-term value of a brand and its impact on business success.
Average Revenue Per Account (ARPA) is a metric used to measure the average revenue generated per user or account. Crucial for understanding and optimizing revenue streams in subscription-based businesses.
Cost Per Thousand (CPM) is a metric used in advertising to denote the cost of 1,000 impressions or views of an advertisement. This metric is crucial for measuring and optimizing advertising spend and reach.
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.