Comment by mbesto | Hacker News Reader

Comment by mbesto | Hacker News Reader

Nick, this is extremely impressive and I applaud you for putting this together so concisely. Some comments:

1. Kahneman and Ariely both mention in their writings how their is a difference between free and even just 1 penny. Especially given how popular Freemium is I thought this might be a good topic for you to cover. (Ariely calls this "market norms" vs "social norms")

2. A common theme here on HN (mainly from people like Patio) is to "charge higher". I couldn't find a place that explicitly mentioned this. Many people perceive higher quality and value of products and services simply because they cost more (regardless of whether they actually do or not)

3. No mention of Kahneman?!?

This is awesome regardless...saving it and sharing it with some clients.

Feel free to contact me directly if you want me to elaborate on any of this.

Thanks so much for the kind words.

1. I remember reading about that concept in Ariely's book. And I actually considered adding it to the list, but I wasn't sure where to incorporate it.

2. I think everything boils down to your ability to communicate the value of your offering. People will pay any amount, as long as they perceive to be getting more value from it.

3. And I can't believe I didn't mention Kahneman anywhere! His research was a large foundation behind a good portion of those techniques.

Re: point 1.

Maybe something like:

"Strategy: Giving away for free and then upsell"

Tactic X: "Give away free product or usage of your service" (talk about Ariely's theory of social norms vs market norms)

Tactic Y: "Up-sell free users into a more compelling value proposition" (distinguish between the free product/service and use it as a framing exercise to get your users to pay)

1. Barrier to entry is very important. Games have an investment in learning the mechanic so getting people to make that investment is something that makes sense to split from the investment of money.

2. Check out the history of Chivas Regal. They were a low shelf blended scotch and at some point decided to simply double their price. No label change, nothing different. Their sales actually went up (and their profit was much higher per bottle obviously).

Since I couldn't find any historical citations about the story:

http://writingabookwithwally.com/writing-a-book/checking-the...

Still interesting.

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