How Hotstar uses framing effect to increase take rate of costlier plan?
₹166 vs ₹125 - Which one is lower? Even a first grader could answer this: ₹125 is lower. When making a purchase decision, anyone who is price-sensitive will choose ₹125.
For both annual and quarterly plans, Hotstar shows the effective monthly price. When the annual price is converted to an effective monthly rate, it appears cheaper, prompting many users to opt for the annual plan. Although the upfront cost for the annual plan is higher(FACT), many users still choose it because it looks cheaper in a direct comparison(FRAMED).
This is the strategy Hotstar and many other companies uses on their paywall. The way prices are displayed on the paywall can significantly impact your revenue by influencing user behaviour.
This is an example of the framing effect. Framing effect proposes that individuals make decisions based on how an issue is presented, or “framed,” rather than on the facts presented. It is a cognitive default to choose an option that is more positively presented, or framed.
In this case, relying on users to do the calculations themselves might not be effective. Most users hate doing complicated maths and making detailed price to value comparisons for every purchase. Therefore, showing effective monthly price upfront makes it easier for users to compare.
Avoid Dark Patterns
Additionally, it’s important to avoid dark patterns. For example in Hotstar's case, displaying the effective monthly price in a larger font can be misleading. It's essential to be transparent first and then assist users in making decisions by providing clear calculations.
Most travel and hotel booking websites display prices excluding taxes and convenience fees. It's only when you reach the payment page that you discover additional charges. This is also a dark pattern because it lacks transparency from the start, pushing users deeper into the funnel by hiding key details.
Dark patterns might yield good results in the short term, but avoiding them will build customer trust, which will pay off in the long run.
How can you use framing effectively to your advantage?
This is just one example—every messaging on the paywall, including title, subtext, price cards, CTA text can impact conversion rates and revenue. Therefore, it's always advisable to run multiple experiments with different framings to maximize revenue.
Running these experiments can be very time-consuming and can require significant investment. Therefore, it is recommended to use a platform like SurgeGrowth, which allows you to run multiple experiments without writing a single line of code. Growth teams can launch these framing experiments in minutes without needing developer assistance.
So, don't waste any time—start experimenting with your paywall messaging now.
Keep growing!
