Monetization Law Number #19
Tell customers which one you want them to buy by nudging them in the right direction
Help your customers choose the right product by a small nudge.
Product/service selection nudges customers to the best option to increase customer satisfaction and your monetization
This chapter explains that helping your customers to make the right choice drives the best monetization outcomes
The Rule provides a quick monetization heuristic i.e. a rule of thumb in operation, a kind of —do this— and you’ll be 80% of the way there.
Rationale explains why the rule works with deeper insights and its use in practice.
Rabbit hole provides more in-depth resources and recommendations for anyone wanting to spend more hours researching each topic.
⓵ Rule 📖
⓶ Rationale 🧠
⓷ Rabbit Hole 🐇
⓵ Rule: Monetization Law #19 📖
the power of suggestion…In every part of our lives, we are nudged.
Monetization nudging helps people make the right choice, increasing customer satisfaction, retention, and monetization.
⓶ Rationale: Monetization Law #19 🧠
Nudging
Nudge is a concept derived from behavioural psychology that applies to behavioural economics, political theory, and behavioural sciences.
The fundamental tenet is the proposition that people can benefit from positive reinforcement and indirect suggestions that seek to influence their behaviour and decision making.
Subliminal nudges in everyday life
Some familiar examples of nudging will highlight the pervasiveness of the nudge practice.
Environmental nudging; we are often provided with a large bin for recycling and a small drawer for general waste - nudging us that more waste is recycling than we initially thought.
Health nudging; an apple a day keeps the doctor away? More recently, five a day have been a campaign in most countries to anchor the consumption of fruit and vegetables in our minds.
Financial nudging; contribute towards your pension, and we’ll double it. This is the govt nudging us to save more for retirement through various tax incentives.
⓷ Rabbit Hole: Monetization Law #19 🐇
Nudge nudge, wink wink
So what does this mean for you or your business?
While the buyer should not be tricked into buying something they don’t need, the goal of nudging is to direct them to a choice that maximizes their utility from the product.
The result - they remain customers for longer hence improving your lifetime monetization.
This builds on the concepts explained by buyer personas, ensuring that the plans suggested matches the profile of the personas you believe will most benefit.
Nudging in action
In addition to creating plans per persona, there is always one plan that is nudged as a recommendation.
This plan will cover a large proportion of your customer base.
The three key actions will be:
place the plan in or near the middle of the plan options
make the plan bigger - either by length or width
use words that imply the default choice like standard, popular, pro or recommended.
🐇 Additional Research 🐇
Highly recommend the book–Nudge–by behavioural science Nobel prize winner Richard Thaler.
His thesis is probably the most adopted of all the behavioural science and econ research and is seen in pretty much all of the SaaS pricing pages
