April 8, 2019

Effectiveness of Pricing Tables With Toggle Switches

Hi indie hackers!

I'm considering adding a pricing table showing a range of options with Annual vs Monthly prices with a toggle switch like this example:

https://www.freshbooks.com/pricing

The price shown is the price per month if payed by month and if you click the switch you see the price per month if paid annually.

Having a table of options is helpful as you can implement price anchoring - i.e. having a high priced option will lead to more sales of a medium priced option, however I am wondering if there is an advantage to displaying the price in this way.

My thoughts on this so far:

  • Showing annual price as price per month could be good as it can clearly be seen as a smaller amount, and is perhaps less scary than seeing the "big" price of the total of a whole years payments.

  • Showing the Annual price in monthly payments could be perceived as misleading or tricking the user as the do not see the full price that they pay at checkout.

I would be interested to hear if anyone has tried this pricing table structure and whether it had a positive or negative effect on website conversion rate?

Also if anyone has any found any research on the effectiveness of this technique I would love to read it!

Thanks in advance!

Andrew.

#ask-ih

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    absolutely agree on both your observations.

    It is a common practice these days to show annual pricing as default. Some even go to the extend of not mentioning it is '/month' and you have to pay 12x that amount upfront! That is bad UX imho.

    Having said that, people tend to remember what they see latest. Considering that your solution will be compared with many, it will be advantageous to show a lower pricing first (as default) unless they wish to prod further.

    I would also recommend that the toggle button is clearly & prominently displayed. Also suggest you mention something like 'discounted by x% on annual purchase'.

    To your initial query, in my experience, you show multiple pricing options to increase ticket size - depends a lot on what you are offering. It is the same concept as freemium.

    The idea is - Folks are normalised by showing a lower costing vis-a-vis to market standard & then shown the incremental benefits in each price category. It is structured such that, they are fine with jumping on to the higher price wagon as the benefits outweigh the cost hike.

    hope this helps!

    dj

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      Thanks DJ that does help. As a developer myself I know how important UX is - clarity is everything! Good idea about labeling the toggle button too.

      It would be great to do some A/B testing on this at some point, but that is something I'll have to try later on as my website isn't set up for it just yet.

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        glad to be of help :)

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    This comment was deleted 6 months ago.

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      Hi Thomas, thanks for your response! I also tend to look at the higher monthly price first. If I'm subscribing to SAAS I'll often get a month at the higher price and then upgrade to the more cost effective annual price if I decide to continue.

      Great point about VAT too. It's tricky in Europe as VAT is different for every country and VAT is now based on where the customer is not where my business is. I'm using a 3rd party checkout and VAT gets added on during the checkout process as we cant show the VAT price until the customer has told us where they are.

      I'm aiming to be transparent as possible, hidden fees are something that gives me a negative impression of a company and I don't want customers to feel like that about me.

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        This comment was deleted 6 months ago.