You’re shopping internet plans. You see a plan that seems like a good deal to you and meets your needs. The price listed in bold text on the website is $50/month. If you look closely, there’s a little asterisk referencing tiny text at the bottom of the page that simply says something like “plus additional fees.”
So you feel it’s a good deal, so you move forward. You enter all your personal info, everything needed to set things up. Then you get to checkout…and the price has increased to $70/month, inflated by a bunch of bogus fees.
You would think this wouldn’t make a difference in your decision-making, but it does. It actually changes what the average person is willing to pay. Among the reasons:
Anchoring: When you’re shopping, you’ve already subconsciously decided the plan is a good deal at $50. Then you put in the time investment to set up the account. When they spring the fees on you, your mind is in a state where it really doesn’t want to reconsider things. You’ve already finished the price comparison portion of the task! So even though you can see the price increase, the plan still subconsciously feels like it’s $50/month.
Anti-Competitive Behavior: these fees make cost comparisons much more difficult. The only way to see all the fees that your account will be charged is to go through most of the account sign-up process. You can’t just quickly pull up the websites of various ISPS and quickly compare their plans/rates.
It’s a slimy business tactic that applies the anchoring effect.
You’re shopping internet plans. You see a plan that seems like a good deal to you and meets your needs. The price listed in bold text on the website is $50/month. If you look closely, there’s a little asterisk referencing tiny text at the bottom of the page that simply says something like “plus additional fees.”
So you feel it’s a good deal, so you move forward. You enter all your personal info, everything needed to set things up. Then you get to checkout…and the price has increased to $70/month, inflated by a bunch of bogus fees.
You would think this wouldn’t make a difference in your decision-making, but it does. It actually changes what the average person is willing to pay. Among the reasons:
Anchoring: When you’re shopping, you’ve already subconsciously decided the plan is a good deal at $50. Then you put in the time investment to set up the account. When they spring the fees on you, your mind is in a state where it really doesn’t want to reconsider things. You’ve already finished the price comparison portion of the task! So even though you can see the price increase, the plan still subconsciously feels like it’s $50/month.
Anti-Competitive Behavior: these fees make cost comparisons much more difficult. The only way to see all the fees that your account will be charged is to go through most of the account sign-up process. You can’t just quickly pull up the websites of various ISPS and quickly compare their plans/rates.