If you’ve ever watched a Video Sales Letter (VSL), sat through a sales webinar, attended a live seminar, or watched any infomercial, you have witnessed Takeaway Pricing – the practice of repeatedly reducing the asking price to make the final offer seem less expensive.
But, have you ever seen it done badly?
It is, shall we nicely say, a hideous, toe-curling embarrassment…
| The red-faced host, almost feverish in his naked desperation, throws the biggest number he can think of up onto the screen.
“I could easily ask, for this amazing package, $100,000!” The audience rolls their eyes inwardly – and in some cases, outwardly. “I could easily ask, $50,000!” But you’re not, thinks the audience. So why don’t you get to the actual price already? “I’ve had people offer me $25,000 for a package half the size of this one.” Yeah? Which idiots were those?. “So, I thought about offering this package today for the low, low price of $20,000.” In what universe is $20,000 a low price? Unless it’s for a new Lexus. “But I wanted to really make this offer an event, so I considered setting the price at $15,000.” The audience is now fighting to stay awake. 20 minutes later… “At $497, this package would be a steal. I’d be virtually giving it away.” Half the audience is now playing Candy Crush on their phones. Another 10 minutes go by… “But the price for you today, if you purchase in the next five minutes, is only… $47!” A heavy silence blankets the room. Two tumbleweeds roll across the stage. A fox in an advanced state of rigor appears at his feet. |
This slight exaggeration makes a point, painful as it is…
Takeaway Pricing, though it may feel cliché, is still a fantastic conversion rate increasing strategy.
Providing you do it correctly and within a proper, logical context, of course.
Consider…
It’s Logical, Captain
Takeaway Pricing works because it completely annihilates the audience’s expectations (making your offer disruptive) and invites them to draw a comparison between the price they would usually expect or be asked to pay and what they will actually pay.
The temptation is to assume that if showing one price drop is effective, then doing it ten times in a row is going to be even more successful.
Or to assume that if dropping from $997 to $497 is effective, then dropping from $9,997 to $497 is going to increase sales even further.
But in both cases, all you do is neuter the entire strategy. The exercise becomes so over the top that it is rendered meaningless.
People may make sales decisions based on emotion, but that doesn’t mean their sense of reason is completely removed. There needs to be some semblance of logic behind your actions or your audience will become cynical and begin to doubt all the quality plot points they’ve seen thus far.
Doing a price drop from $997 to $497, just for today, is believable.
But coming down from $100,000 to $47 (as in the earlier example) is seriously ridiculous. It’s nothing more than a stunt. Everyone knows it. Noone appreciates it. Remember, in the previous article we said that the value of your package should be no more than 4-5 times that of your eventual asking price (The Bonus Stack).
The key to effective Takeaway Pricing is to do it ONCE (or twice if you use the “cloaking” method I’ll be explaining in a moment) and to make the drop substantial, while believable.
Let’s go through how Takeaway Pricing should be used correctly in your VSL.
Plot Point #27: Takeaway Pricing
If you’re following this series from the previous article (The Bonus Stack) your audience should be looking at a page showing your product and bonuses, with a dollar value next to each one.
Start with the obvious and explain to your audience that they won’t be paying anything for the bonuses today, and visually, on the slide, put a strikethrough each bonus value price. This action isn’t Takeaway Pricing, it’s simply removing a bunch of genuine costs from the equation.
Next, refer to the normal everyday price of your product (What is Your Product Worth?) and announce that, today only, the offer will be less than…
- Two-thirds of the regular price.
- Half of the regular price.
- A third of the regular price.
- A fraction of the regular price.
Choose ONE of the above – or something similar – depending on what your actual offer price is going to be. And, again, put a strikethrough the normal price of your product.
This is Takeaway Pricing done properly.
You’ve started with a package that contains lots of great bonuses that, collectively, are worth a substantial amount, but you’ve not directly suggested that this was ever the price you were going to charge. You’ve just put this large sum in the mind your viewers.
Then you demonstrated the regular price of your product by showing them where currently (or previously, if the product is not on general sale) they could buy the product for this price.
This is critical because you’re starting with a figure that is in no way made up or artificially padded. It’s a real number, and you’ve just announced that you’re going to reveal a price that’s even better than this reasonable sum.
And then…
You still don’t reveal the price.
*Groans from the audience*
Relax, my friends, it’s coming in a moment. In fact, you should literally say something along those lines.
“But before you see this awesome price, I’ve got something I quickly want to mention.”
Plot Point #28: Here’s My Promise (Guarantee)
A money-back guarantee is an essential component of any offer. Announcing it at this stage in your VSL is the perfect moment.
Money-back guarantees are so de rigueur that their presence is barely noticed by consumers. But at this stage of your VSL, when you’re about to announce the price of your offer, now is the time you have your audience’s rapt attention.
There’s no fancy strategy for this stage – simply explain that you’re personally committed to their success and, to that end, you want to take on all the risk. You want the deck stacked in THEIR favor.
Naturally, you have every reason to believe that they’re going to have nothing but success, but since you can’t control everything, you want to make it as easy as possible for them to get their money back… just in case.
If you want to make your guarantee seem even more generous than what they’re used to, try one or all of these modifications.
No Questions Asked: To obtain a full refund, the customer doesn’t have to speak to a person or give a reason. Simply open a support ticket and request a refund.
You Get to Keep…: If they ask for a refund they can still keep one or two specified bonuses as a “thank you” for at least giving the product a try.
Muppets Allowed: They can ask for a refund, even if they don’t like the color or they feel like it disrupts the vibes in their house. Come up with anything silly or mundane that you like and tell your audience that they can even ask for a refund for these reasons and you’ll honor it.
This last modification should sound jokey, but it will still be effective because it seals your commitment to offering a no-quibble refund policy. It also, curiously enough, has the secondary effect of actually DISCOURAGING people from asking for a refund for reasons that would make them feel shallow or that they simply haven’t tried hard enough.
Plot Point #29: The Awesome Price
Do a very quick recap of the features, the bonuses, and the guarantee, and then finally…
Finally…!
Reveal that they can get their hands on the entire package for just… whatever your price is.
Notice that, although Takeaway Pricing is very much the strategy behind these last few plot points, you’re really only showing a price drop, once.
And once is plenty, providing that you’ve carried out the recommended steps leading up to this moment, and that the price drop is substantial while remaining realistic.
Remember the formula…
- The estimated value of your package should be 4-5 times that of your final offer price.
- The normal, everyday price of your main product should be the first offer price that you suggest.
- The final offer price should represent a sizeable drop from the normal, everyday price.
Don’t go from $997 to $897. You’re only doing one price drop, so it should have an impact.
A good example would be an estimated value of $2,500, a normal, everyday price of $997, and a final offer price of $497.
Or perhaps an estimated value of $4,000, an everyday price of $1,997, and a final offer price of $897.
Those kinds of figures are powerful without seeming unrealistic or “too good to be true.”
An optional tweak at this point, to increase the impact of the final offer price is, rather than dropping the price a second time, to ADD something to the overall price. This could be an extra bonus, a longer membership period, or even – and if you watch infomercials, you’ll see this done – a SECOND copy of the product at no extra cost.
This amazing worktop rotisserie can be yours today for only $97 plus shipping… But wait! Purchase today and we’ll give you ANOTHER rotisserie, that you can give to a friend as a gift, for just the price of shipping!
This “cloaking” method of Takeaway Pricing strategy adds rather than taking away. It has a powerful impact, without merely repeating the price-drop action you’ve already employed.
***
There’s a fine line between smart, effective marketing strategy, and clichéd, blatant tricks that will get you labelled as a purveyor of snake oil.
And staying on the right side of that line is mostly about exercising some restraint, and regularly asking yourself if your pitch retains a sense of logic.
Give reasons for offering a discount. Give reasons for including a particular bonus. Give reasons for including a cast-iron guarantee.
If you review the articles in the series, you’ll see, time and again, how to strike a balance between strong selling techniques and maintaining respect for the intelligence of your audience.
Now that you’ve revealed the price of your offer, all that’s left to do is invite your audience to hit the “Add to Cart” button. But that isn’t immediately followed by your VSL coming to a conclusion.
The way in which you close-out your video can coax even more of your viewers to make a buying decision. In the final article in this series we’ll demonstrate how to construct a FINAL call-to-action.
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