Hello nerd friends,
If you’re running ads for any business that has multiple pricing plans, there’s a way to squeeze more sales out without changing the ads or the landing page.
Just slightly changing the names of your plans can shift both how many people buy and which plan they pick.
The study:
Across five experiments with almost 2,000 participants, researchers tested how hierarchical labels like Bronze/Silver/Gold or Silver/Gold/Platinum affect buyer behavior. The actual prices and benefits stayed the same. Only the plan labels changed (Wang, Deng, & Chen, 2024).
🧪What they found:
Superior-sounding labels (like Silver/Gold/Platinum) made people more likely to buy overall
But these same labels caused almost 2x more buyers to choose the cheaper plan (64.3% picked the cheapest option with Silver/Gold/Platinum vs. only 36.8% with Bronze/Silver/Gold)
The usual “compromise effect” where people pick the safe middle option weakened when superior-sounding labels were used, because people shifted more to the cheapest tier.
Why did people choose Silver every time?
The difference between “Silver“ and “Gold“ in our heads is less, that the difference between “Bronze“ and “Silver“. So it feels like even if we go with the lowest plan when it’s called “Silver“, it’ll be good.
When the lowest plan is called “Bronze”, it seems much worse, so buyers would opt for the middle option of “Silver“. This is because of the Decoy Effect(adding an unattractive option to get people to see the regular option as premium) and the Compromise Effect(we like to always choose the “safe bet” that will reduce any potential regret).
Why did people subscribe more overall when Platinum was added?
Superior labels make the whole set feel more premium, so buyers may feel that even the lowest plan gives them something good. That perception makes subscribing less risky, so it decreases “decision deferral”. Basically, it makes people more likely to buy.
💡Takeaway
What should you choose?
It depends on your goals.
If your goal is to maximize total signups, use superior-sounding labels like Silver/Gold/Platinum.
If your goal is to push higher-margin plans, stick with more ordinary labels like Bronze/Silver/Gold.
Stay awesome my friend,
Ksenia (the biggest nerd)
P.S. Thank you, it means a lot that marketers and business owners like you are reading my newsletter.
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