About Payments and Payment Psychology

Rarely a week goes by that I do not get a phone call from a marketer about their current payment program. 
The subject is always the same;

“My payment program no longer generates calls.”

After a few minutes of discussion it is not that the calls have stopped, but the call volume is less than expected.  One note, these are not mature programs that have run their course, but rather new programs that are using standard payments of $33.33, $39.99, $49.99 and similar standard offering prices.  Marketers are finding that standard price offerings are no longer generating the volume of calls as in the past.  The ‘Noise’ around the price has risen to a point that it is no longer a ‘Call to Action’ as much as having gone the way of ‘But Wait……’

Has econometrics come to Direct Response?

Simply, yes.  Research has even shown the price elasticity can be seasonal; for example, consumers are willing to pay more for certain "branded" products during the holiday season, but will buy generic alternatives at other points during the year.  We have consulted with a number of companies that have raised their product price and increased response.  One company added an additional $50.00 payment raising the price to $249.95 and experienced an increase of 60% in net sales.  The why is simple, today’s consumers are reluctant to buy too good a deal.  The product features supported a higher price and created a higher value in the minds of the buyers.
Another product sold for 3 payments of $70.00.  The target demographic tested best at with a $19.95 trial and 7 payments of $29.95.  The change generated sustained MER of over 3 from an initial of 1.6-1.8. 

How do I know what to charge?

Give us a call and we will be glad to discuss your product pricing and how we can help.  We will send you four cases of how targeted payments helped make programs successful.

 

OMT Financial Services, LLC, 118 N Peters Rd, Knoxville, TN 37923 phone: 727-449-1935, email: infoNew@omtfinancial.com