Joshua Porter used some psychology principles to examine how to provide a persuasive user experience. See the slides and audio from his presentation are available, in case you missed it (I’ve embedded the presentation below).

Over the past few years, I’ve been exposed to a great number of webapps+software that had a free version or trial and then offered something extra in the paid service. Most of them were non-essential to my work, but did offer something I enjoyed using, and potentially made me a little bit more efficient (e.g. mindmeister or basecamp).

One thing they all share in common: the paid service or one off price felt too expensive. There are now so many services that I’d like to buy into, that my pricing decision isn’t made in isolation. I find myself thinking: “that’s not too expensive, but if I was only using it occasionally and there are 20 others, it costs too much.”.

The Sign Up Problem

Joshua’s presentation illustrates ‘the signup problem’ brilliantly (see slide 29). Software customers overvalue their existing software (“why should I pay for x new widget?” i.e. hard to persuade) and software makers overvalue what they’ve created (“my widget really IS worth x much!!” i.e. missing out on sales).

I find myself thinking about the second point every time I get to the ‘Pricing’ page of software I might buy. I’m convinced that sellers are missing out on big chunks of sales as a result.

If there’s an ongoing cost, even if its small, I also worry about being tied into something I won’t use much, especially if I’m paying for a few. If I’m buying software at a one off cost, I end up thinking that the price is wrong given the ultra-low marginal cost.

Maybe I’m too frugal, and unrepresentative of the way a lot of buyers think. What I do know is this: when I buy software/services online, its not just about the alternatives to one particular market. I lump together everything I’m spending on these things into one big cost that I (irrationally?) try to keep under control. Therefore, things that don’t directly compete (e.g. basecamp for project management and blinksale for invoicing) end up affecting each other.

Now I know I’ve skipped over operating costs, development costs, and a lot of other factors that influence supply and demand. However, I can’t help but feel that these markets are being constrained by cognitive biases.

I’d be very interested to hear about alternative pricing/incentive approaches to the existing models. This is something I’ve been thinking about in relation to other industries (particularly film and music – MUCH more on that later).

This issue is important to me at the moment as I’m formulating more ideas about how to take the useful things that are out there and explain the benefits to individuals and businesses (see my ‘Geek Habits for non-Geeks’ workshop). The pricing model will be critical to adoption in so many cases, that I feel strongly that things need to change.

Mostly I end up thinking about how to assess how useful something is to a particular individual, and ‘tip’ on this basis. Something along these lines:

“You’ve used our widget for 99 hours this month, we suggest you pay X on this basis.”

“You’ve used our widget to create 50 files, we suggest you pay X on this basis.”

Taking this a step further, you could leverage cognitive bias to get people paying more, or at least more consistently. Social proof is instructive here, and I know its been tried on the independent music scene (wish I could remember which artist tried this…).

“On average, people have paid x per month to use our software. Pay this amount now.“

I’d like to take this last idea into the real world, but I’ll save the idea for another article. Thanks to Joshua for getting me thinking about this!

I am much happier with the results this time: the time I spent revising the concepts really paid off. I managed to explain the key points in less time, and with much more emphasis on personal benefit to the audience. Ellen’s advice on how to run the exercises was a big help: everyone understood what to do (although Google Reader was down for some of the time, great timing Google!).

Gavin has mentioned that there were still a few assumptions I made during the talk; I’m going to work on eliminating those.

Attendees

Those who came along should note that I’ve created a workshop page with some links to the things that came up, e.g. blogs like Ill Doctrine. If you need them, the workshop slides are also available (9mb PDF).

Happy feedreading, bookmarking, blogging etc!

I’m repeating my workshop on Thursday May 8th at The Werks in Hove.  Hopefully it will be much improved based on what I learned last time! Its been quite an interesting time since I did it: a few different parties/organisations have expressed an interest in me doing it for their organisation.

I’m being much more careful about the numbers this time, so please mark yourself as attending on upcoming if you want to come.

See you there!