TLDR: WATCH THE VIDEO (click above)
I’m paying tribute… to Tribute. 😄 Tribute makes group video gifting easier than iMovie — and also uses smart psychology to make it virtually impossible for me not to pay for it. Today we’ll learn why (and give a shout-out to my twin sister Brittany along the way) 🎉
3 things you’ll learn from watching this:
How Tribute’s separation of consumption and payment helps me enjoy making videos more
Why people are more likely to do something if you make it easier for them
What makes a pricing model of “sunk effort” so effective
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👂 Transcript:
Okay. Today, we are going to pay tribute to Tribute. They do one thing, they do many things, but they do one thing really, really well, better than anyone else I've seen, and it's around their pricing model.
By the way, I'm Emily Astor-ing you. Just went for a run, recording a video. If you know, you know that reference.
So we are going to manage the Tribute. I am doing a Tribute for my twin sister, Brittany, and basically started with the idea that you are to invite participants and there's two prices.
There's $29.99 for base thing, and then there's $99 for them to do it for you. And so you invite participants, so I sent a mass email out to people and asked them to – and this is what Tribute is – it’s basically record a lovely video for a friend for their birthday, or just because, and then Tribute will put them all together so you can send a nice lovely video to them and make their day.
Of course you could do that with iMovie, but Tribute makes it easy. Behavioral science suggests that people do things that are easy, and of course, this is what Tribute has made their fortune on, or somebody on.
But here's a clever thing. So basically, I've invited all these participants. And now I have 11 videos of people saying nice things about my sister. How wonderful.
And I have not paid, I have not paid yet. They told me it's $29 and at the very end I'm going to be asked to pay. “Publish and Checkout. Don't share, I'll handle it.”
By the way, the weird thing Tribute does is try to upsell me on things like codes, QR codes, and keychains. Very weird, but in general, very nice product.
But they're basically asking me at the moment that there is zero way I would be able to say no after I have 11 people giving me their videos, how would I not be able to pay?
And so, the key thing here is basically separating the consumption from the payment.
So, Dan Ariely has a nice example where he basically says “Look, if I charged you for every bite of pizza that you ate, you would eat less bites of pizza. If I charged you upfront or at the end, you would eat more bites of pizza.”
Another example, the cruise ship, you're charged upfront for the cruise and then you enjoy the cruise and consumption is high.
By separating consumption and payment, people can actually enjoy consumption more.
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So imagine a world where I charged you for each of these videos. Even if I charged you less than $29, you'd probably not want as many videos because you'd feel the pain of paying for having each video, you know, come online, right?
And so we want to in general, when you're thinking about pricing models, separate out the pain of paying, separate out the consumption and the payment.
And what this does is actually pretty novel. And the reason why I'm so fascinated by it is it really takes this idea of what I'll call sunk effort.
Like, we have this idea of sunk costs, which is the definition of sunk cost is basically you pay for something, let's say you pay for a movie and then you're watching the movie, the movie is terrible, but you're sitting through the movie because you paid for the movie.
So you just wasted all this money, but you're not going to leave because you just sunk all this cost into it.
And so this is a little bit like sunk effort where you sunk all this effort into something, and so of course you're going to keep going with it.
And so this pricing model of sunk effort is very, very compelling because of course I cannot do anything but pay them for these videos.
And honestly, it's worth way more than $29. My sister is going to be so delighted.
She's going to be so happy when she gets this. And I mean, maybe they should probably charge me more at this point.
So they're just up-charging me for QR code keychains. But maybe that's another Loom.
Good job, Tribute – giving you some tribute.
Questions about your product? Email kristen@irrationallabs.com.
The Science of How Tribute Gets You to Pay (& Pay Tribute): Product Teardown