Hurdles, in the context of pricing, can be an effective part of a price discrimination strategy. New content on the Beyond Cost Plus site looks at how the promotion below uses a product attribute, color, as a hurdle to selectively discount effectively.
This same product is offered in a wide variety of very attractive colors, but the discount is specific to this one particular color. The color (which the ad itself explains is not desirable).is the figurative "hurdle" the customer has to jump over in order to get the discounted price.
The seller would probably sell more units if they discounted all colors, but they would also be "leaving money on the table" by discounting when they hadn't really needed to. They don't want to discount to the person that really wants his favorite color, or the color that matches their favorite apron. They only want to discount to the customer that is willing to take the least desirable color in order to get the deal.
This is why hurdles, when used properly, are so effective. They efficiently and automatically stream customers according to what they really value. In this case the people that like the prettier colors pay full price, the people that care more about cost pay a discounted price.
The ad also makes very effective use of some of the principles documented by Dr. Robert Cialdini in his book Influence: The Psychology of Persuasion. They use the scarcity principle by referencing limited quantities and product shortages, triggering the fear of loss (a very powerful motivator). They use social proof by referencing the behavior of other customers.... the ad suggests that most customers don't want brown, but love this bargain. And by making the admission that brown is not very popular (at least at full price) they add credibility to their use of the authority principle.
The seller would probably sell more units if they discounted all colors, but they would also be "leaving money on the table" by discounting when they hadn't really needed to. They don't want to discount to the person that really wants his favorite color, or the color that matches their favorite apron. They only want to discount to the customer that is willing to take the least desirable color in order to get the deal.
This is why hurdles, when used properly, are so effective. They efficiently and automatically stream customers according to what they really value. In this case the people that like the prettier colors pay full price, the people that care more about cost pay a discounted price.
The ad also makes very effective use of some of the principles documented by Dr. Robert Cialdini in his book Influence: The Psychology of Persuasion. They use the scarcity principle by referencing limited quantities and product shortages, triggering the fear of loss (a very powerful motivator). They use social proof by referencing the behavior of other customers.... the ad suggests that most customers don't want brown, but love this bargain. And by making the admission that brown is not very popular (at least at full price) they add credibility to their use of the authority principle.
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