Though traditionally seen as a behind-the-curve industry, the newspaper business has silently led the way in using online consumer behavior to its advantage. The New York Times has remained at the front of the pack since it introduced online subscriptions in 2011. Over the years, they’ve tried nearly every pricing strategy under the sun–from creative bundling and price anchoring to variably-priced subscriptions based on your consumption. Recently, they’ve turned to price perception as their vehicle of choice, creating lessons that are valuable to every subscription business.
In this latest strategy iteration, The New York Times has started to describe their price in weekly terms, though they continue to bill monthly. This takes advantage of two unique aspects of their customers’ psychology:
- They’re pricing in familiar terms for those who have long held newspaper subscriptions–the week as a “unit” of news is deeply resonant for those who remember flipping through their color Sunday paper;
- They’re decreasing the perceived investment by using a smaller unit of time – even their most costly option, at $10 per week, feels significantly less expensive than its analogous $40 per month depiction. This is a form of implicit price anchoring: instead of anchoring against a directly stated price package (which they’ve previously tried), they’re anchoring against one’s assumption of reasonable cost for a news subscription, and leveraging varied pricing terms to create a perceived increased value.
Compare their prices on a weekly and monthly basis – they’re exactly the same, but the monthly pricing feels much less attractive.
| | Sunday | Three Day | Weekday | Daily | |---------------|--------|-----------|---------|-------| | Weekly Price | $5 | $7.50 | $7.50 | $10 | | Monthly Price | $20 | $30 | $30 | $40 |
And, within this framework, they’re continuing to take advantage of price anchoring. The NYT would like you to subscribe to the Weekyday subscription – it increases their print circulation (which, in turn, increases their advertising revenue), and the marginal cost of adding an additional stop to a paper route on 5 days is minimal over 3 days. They’ve ensured you see the value of that subscription by:
- Offering multi-day subscriptions at a marginally increased cost compared to a single day (Sunday), so that you immediately see the multi-day subscriptions as a better deal;
- Offered the Weekyday subscription at the same cost as the Three Day, to incline you towards the Weekyday (why would you pay the same for less?);
- Provided a premium option, Daily, to emphasize Weekday as the high-value middle ground.
Put together, they’ve created a hard-to-say-no-to framework of value for any reader exploring a subscription.
- When developing your pricing strategy, consider showing your subscription prices in units of time (weeks or days) that are less than the typical pricing in your industry (likely monthly). This creates a perception of value, even if the prices are identical mathematically. Our initial impressions–our emotions–aren’t good at math. If there’s a natural unit of time in your industry, like the week is for the print news industry, even better.
- Where possible, use explicit price anchoring on top of these price strategies for added effect.