Why Customers Choose The Higher Priced Product (More Than 95% of the time)

Why Customers Choose The Higher Priced Product (More Than 95% of the time)

Imagine you’re going to a workshop.

The price of the workshop is $700 (Let’s call this Option A). And then there’s a premium version of the workshop that’s priced at $770 (Let’s call this Option B). Which of the two options would you choose? The $700 or the $770 option?

I know, I know. You want more detail, right?

OK, here’s more detail. Option A and Option B are exactly the same. Identical in every respect. If you get cookies and muffins and 200 pages of notes for Option A, you get cookies and muffins and 200 pages of notes for Option B. There’s no difference at all. You get every darned thing you can think of, no matter which option you choose.

Now will you pay $700 or $770?

Seems like a ridiculous question, doesn’t it? And yet, would it surprise you to know that over 95%, and sometimes even 100% of our clients pay the higher price? Ah, now I’ve got your attention. And besides, you’re sure I’m hiding some detail from you. No one in their right mind would pay more for exactly the same thing.

And you’re right

It’s not exactly the same thing. The bonus tips the scales in favour of the Option B. Bonus? What bonus? Let’s go back to that workshop, shall we? Let’s say that for Option A, you got the workshop (with nothing held back). But for Option B, you got the workshop, as well as a special 2-week course implementing the elements of the workshop. And let’s say that 2-week course is priced at $500 (normally).

Immediately you do the math in your brain…

Option A = $700 (For the workshop)

Option B = $770 (But it’s not just the workshop. You get a course worth $500, and just for $70)

Now your brain is like a fried cutlet

It knows that $700 is the sensible option, but not the smart option. Because for just $70 more (that’s 10% more) you’re getting a follow up course worth $500. And even if you can’t do the math, you know for a fact that you’re getting more for less. A lot more, in fact.

So then it’s easy, right?

To entice the customer to choose Option B, all we need is a bonus. Let’s just find something that’s worth $500 and chuck it in.

In fact, taking the example of this workshop itself, let’s just say we pull out the $500 follow-up course and put in another option. Let’s say you removed the follow up course bonus and instead gave $500 worth of audio recording of the workshop.

Would 95% of your buyers still choose Option B? No, they wouldn’t. It would almost immediately slump to about 50%. And there’s a reason why. There are people who prefer to read, instead of listening to audio. And for them, they’re not getting $500 worth of goodies. Instead they’re paying $70 for no return. So they choose Option A instead, which is cheaper.

So what is the critical element that makes them choose Option B?

The element is “something so amazing, that it’s perceived to be almost better than the product or service itself”. Let me give you an example. Let’s say you’re having a course on cartooning (like we do at Psychotactics). And now you are offering two options.

Here are your choices

Option A = $689 for a 3-month course.

Option B=  $789 for a 3-month course + Composition methods that makes cartoons jump from the page + Learn Critical Photoshop techniques in 30 minutes

No choice, eh?

Correct. There is no choice. Because now your eyes aren’t tracking the 3-month course. Your eyes are tracking the bonuses. The bonuses seem more valuable than the product itself at this point in time. You probably already know that there are some things that mark out the experts from the average cartoonists (yup, that’s the composition methods). And you’ve struggled with the beast called Photoshop on occasion. And anything that would teach you to draw, and use Photoshop in a really intelligent way would be worth the kopeks you’re about to pay.

But it doesn’t stop there

Just listing the bonuses is a good idea. But you need to add two more things:

1) You need to put a value on the bonuses.
2) You need to explain WHY they’re important.

1) Value on the bonuses: Is the Photoshop technique section worth $25 or $150? That composition stuff you’re doing: Is it worth $20 or $250? If there’s no value, how would the customer know? But when there’s a value or price on it, it’s clear, because then they add up the price and realise—oh, this Option B is worth so much more. But it doesn’t stop there, either.

2) You need to explain WHY these bonuses are important: Is there any more detail about what Photoshop techniques you’ll cover? Is there any information on how much time I’ll save (even if I’m a competent Photoshop user?) And then what about the composition stuff? I’m not sure I want to learn composition, because it sounds ugh, like learning scales or learning tables in math class. And so, you need to explain.

In short, you’re treating the bonuses with a lot of care. You’re explaining, you’re putting value on them. If you can, you should be demonstrating your bonuses with a visual (online) and with boxes or graphics (in a live presentation).

Now Option B isn’t just Option B

It’s the most desirable option. It’s the option the customer must have at all costs. And most customers do. But the bonus needs to be desirable—and you have to make it yummy as heck. It can’t be something (like the audio recordings) that will be rejected outright by 50% of the audience. And it can’t be something that you just found on your desk and threw in as a bonus. You have to make that bonus a star. You have to really drive home the facts and the price/value.

In fact, here’s what I do in most cases

I start with the idea of the product, and then I write out the bullets. For instance, right now I listed all the things I’d cover in a series of books on Community-based membership sites.  And I listed the bullets. And then often, I’ll get clients to choose which are the most desirable elements.

Then I unbundle that element, and give it prominence of its own, often making sure that the bonus has enough clout to almost stand alone as a product of its own. Yes, you need make it that valuable.

But then, at other times, I’ll add on a bonus based on something I’ve created specially for the event or course or product. Or I’ll use something that I have in my archives that’s extremely desirable.

And here’s one way to know if your bonus is truly desirable

Take it away. Yes, take it away. Have you ever given an ice-cream cone to a child and then taken it away. Well do the same for your client. Show your client the product/service, and then list and explain the bonus.

Then take the bonus away.

Does the client throw a tantrum?

If so, that bonus is really desirable. So with the course above, the follow up course was really desirable. The Photoshop and composition techniques, ditto. When you take it away, the client must feel real loss.

So ask yourself:

1) Have I got desirable bonuses? Are they almost more desirable than the product or service itself?
2) Is the bonus such that about 50% of the audience may reject it for some reason?
3) Do I have a value listed on the bonus? Does that value seem more or less accurate or over the top?
4) Did I bother to explain why the bonus is important?
5) Did I have any additional images that show off the bonus?

If you answer yes to most of the above (si, you can get away with not having all, but it’s not ideal) then there’s no reason why the client won’t buy the higher priced product. In about 8 years of running this system of Option A and Option B, we’ve had 95% of clients who’ve chosen Option B (the more expensive option).

And with the most expensive purchases e.g. The Article Writing Course where the prices hover near the $3000 mark, the strike rate is 100%—yup, every single one chooses Option B.

That’s because clients aren’t idiots

They know value. But only if you explain it. And put a price tag on it. And when you do, you get outstanding results.

Only 95-100% of the time!
P.S. Do you have a story on how clients choose higher prices? Share it here. If you have a question, I will answer it here.

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  1. Rita B says

    The bonus has to be complementary, right? It needs to be of use only when applied to the product. For eg. Where would you apply the bonus “Photoshop techniques”? On the product “cartoon drawing techniques”.

    Correct me if I am wrong, Sean. In this manner won’t we be able to address the issue of no-takers-without-bonuses as Vaagdevi mentioned above?

  2. Vaagdevi says

    Nice post. Surely a great marketing technique that would work on the masses in general.

    But from another perspective, making the free/bonus stuff a star might backfire, don’t you think? In the long run. It does not work all the time. Take the Hoover Free Flights fiasco for example. It was a cross selling disaster. People started buying the vacuum cleaners only for the airline tickets. The main product took a back seat while the accessory won. I know it’s not on the same lines as your example, but essentially one thing is common. The “accessory” is made to look like the star. Next time you sell the product, there may not be any takers unless you offer the bonus with it. I would feel sad if my customer threw a tantrum because I offered him only the product of all my efforts without the made up bonus with it.


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