CBR Briefing #76

The ‘dollars a day’ pitch makes consumers feel they’re getting more

• When creating pricing plans for products and services, businesses should consider following the lead of charities that ask people to donate “dollars per day,” according to Chicago Booth’s Daniel Bartels and University of Rhode Island’s Stephen A. Atlas.
• Framing a price as a series of daily payments rather than a yearly sum makes people think of the enjoyment they would derive from the product each day, the researchers find, which may be more appealing than the idea of one aggregate benefit.
• Such a payment schedule helps to define the benefits consumers imagine they would receive from the product.
• Across a range of experiments, participants were more likely to donate to a charity, lease a luxury car, and buy a subscription or meal- delivery service when periodic pricing was offered—even though the lump sum was a better deal in some cases.