Smarter Pricing: How to capture more value in your market

The Machiavellian way to communicate

Prices are often persuasively presented in terms of a bundle. The value of the bundle price can be supported by a series of figures showing the effective discount off each element within the bundle. The framing effect (see Chapter 4) tells us that customers respond positively to news of gains – so give them many gains. On the other hand, if the bundle price has to go up, quote only the single total increase – minimize the news of ‘losses’. Follow Machiavelli’s advice:

Severities should be dealt out all at once, so that their suddenness may give less offence.

Benefits ought to be handed out drop by drop, so that they may be relished the more.

—Niccolo Machiavelli

In writing about the framing effect in Critical ...