Product Color As a Pricing Hurdle To Segment Customers

Something as simple as product color can be used as a hurdle to help identify which buyers are truly focussed on price, discount to them exclusively, and avoid unnecessarily discounting to customers that are less concerned with price.

Thermoworks makes a highly regarded digital kitchen thermometer. The utility of their product (waterproof, accurate, instant) is widely respected. It is a great product that consistently gets excellent reviews in cooking magazines and on related websites.
 
The company clearly understands that utility is not the only consideration. The look of of the product also matters and color in particular is an important attribute. Take a look at this picture:

There would be no point in offering so many colors if color was not something that people valued. Experience has taught them that many customers will pay for the ability to select the colour of their choice.

Many, but not all. Other customers will be more concerned with price than color. Let’s say that the company wants to activate those customers. They want to motivate the ones that care more about price than color, and who have not yet made a purchase because of the cost, to act and buy a thermometer.

One option would be to have an across-the-board sale that discounted all colors. This would certainly appeal to the customers that are focussed on price, but customers that were prepared to pay more to get the color of their choice would get the same discount, meaning less revenue and lower profits.

The company would be leaving money on the table by not charging those customers full price. Ideally they could separate the customers that prioritized price and target them separately, offering a discount that would not be available to those that prioritized color.

The solution? Use a hurdle to differentiate the customers that are truly more concerned about price than color. And here is how they do it:

The entire ad, simultaneously and effectively, repels those that care about color while attracting those focussed on price. The company is offering a discount, but only if you order the color nobody wants. They even employ some sophisticated tricks to convince you nobody wants it.

Principles of Persuasion

Note how beautifully the ad uses two of the concepts described by Dr. Robert Cialdini in his book Influence: The Psychology of Persuasion.

 

Scarcity

The ad stresses that stock is limited several times. Lines “Until current stock is gone!” and “Most years we run out before some customers even get a chance to see it. So don’t wait! Limited to stock on hand” all emphasize scarcity, and trigger the fear of loss – a very powerful motivator. It is also presented as exclusive (they’re choosing to share some secret inside information with the people that get their emails) which adds credibility.

 

Social Proof

The company uses social proof several times. First they use it to reinforce the hurdle by admitting that brown is not very popular with other consumers. They continue by mentioning that the sale is incredibly popular with other consumers – so popular that most people never even get to see the brown, and then follow up with the line about brown being the fastest.

 

Authority

When the seller admits to a negative, but points out the wide variety of other optional colors, this enhances their credibility by admitting a drawback first. In this example the seller admits that brown is not very popular, making their other claims more credible.

 

The best part is the way they combine social proof (with exclusive information)and authority when they say “We don’t sell very many Brown at all…” to reinforce the fact that brown is not a very desirable color. They’re using powerful persuasion techniques to convince you that most people don’t like brown, and it’s brilliant, because it means that if you genuinely liked brown and were not focussed on price you might be tempted to switch to another color at full price. By painting the color brown as less desirable they make the hurdle more effective.

 

Together they reinforce two points:

  • Other consumers really don’t like brown.
  • Other consumers think this is a really great deal.
How do people respond to the ad? If I’m focussed on price this is my chance to prove it. The company is almost issuing a challenge “ok, you really want to save money on our thermometers? Buy the color nobody likes at a discount”. If I really am serious about price I’ll take that deal.
 
If I’m on the fence, torn between price and color, this helps me come to a decision (and a purchase). Maybe I’ll decide price is my priority and take the deal. Maybe I’ll decide that for an extra $11 I’d rather have the color of my choice. Either way the decision has been put into a context I can easily understand and it becomes a simpler choice to make, and another sale for the company.
 
It is an outstanding of using a hurdle, in this case color, to differentiate customers and increase sales and profits by discounting only when necessary. It also makes great use of the principles of persuasion introduced by Dr. Robert Cialdini.

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