The Framing Effect in SaaS Marketing: Sell for $0 or "free of cost"?

Someone conducted fascinating research in Korea on how consumers respond to free promotions with different presentations and found that using “$0” instead of “free” could increase the conversion rate. Sounds like a half-truth, doesn’t it? Can word choices actually influence the way decisions are made?

It’s unbelievable, but it’s true and owes to something called the framing effect. To my surprise, I even found some real-world examples while researching the subject…

So..what is the framing effect?

The framing effect refers to a type of cognitive bias where people make a buying decision based on how the information is presented (”framed”) rather than the information itself.

We look at how the information is worded, what’s been emphasized, and by whom. For example, you’re more likely to try a tool recommended by your teammate than when the same tool is recommended by a member of another team you hardly know (unless you’re on G2 or Capterra!).

As buyers, when choosing between options, we tend to look at what features or benefits of the product are highlighted: negative attributes (Only 10% fat) or positive attributes (90% fat-free).

And what do we choose? Most of the time, it’s the 90% fat-free option — even if it’s the same information, just framed differently.

But the question is..why!?

As humans (and buyers), we all want to avoid loss. In comparison to a gain, avoiding a sure or probable loss is a whole lot more significant to us. This is why we naturally go for the fat-free option and risk-averse investment options.

Now, contextually, the framing effect makes a tonne of sense for someone shopping at their local grocery store. But how does the framing effect play into product marketing? For example, SaaS.

Say someone who’s picking between two different SaaS products. Will they be persuaded to take action if the CTA button said “Try for $0”? Turns out, the framing effect works even better within those contexts.

Let me explain how.

How a single word decides the difference between a click and no click

The often-quoted A/B test by Oli Gardner, Co-founder of Unbounce, is a testament to why word choices matter. While working on a client project, Oli wanted to see which CTA would be more effective:

A: Start My Trial

B: Start Your Trial

It was only a difference between “my” and “your”. So they decided to run an A/B test, and to Oli’s surprise, the CTA with “my” outperformed the one with “your”.

Turns out, first-person phrasing works much, much better. When used on a PPC landing page, it even got Unbounce a staggering 90% increase in click rates.

As a buyer myself, I can understand why. Both the CTAs, even though asking to take the same action, invoke different sentiments in the visitors when read.

“Start my trial” - This CTA sounds more like the visitor is giving instructions to the machine. It gives the visitor a sense of “power”.

“Start your trial” - This CTA sounds more like a nudge. Like something you’re “asked” to perform and have no control over.

Here’s another example by Brad Shorr, Director of Content & Social Media, Straight North, as shared in a post on Wordstream.

They A/B tested two different CTAs for a PPC Ad, with just a slight change in wording.

A: Get $10 off the first purchase. Book online now!

B: Get an additional $10 off. Book online now.

Which one do you think performed better?

..if your answer is B, you’re spot on. Brad told Wordstream that the CTR nearly doubled with option B, even though he was pinning his hopes on option A.

And this is why word choices matter.

A brief note on CTAs and “framing” as a marketing practice

A single CTA isn’t the sole driver of conversions. NO!!!! It’s the last decision a website visitor or lead makes when they’re on your product/landing page. And to bring the lead up to that point — how you position and market your product plays a humongous role. How you “frame” your product/business in the market plays a humongous role.

Because are you just another SaaS in X or the next “Uber of X”? Is your product “all in one” or is it “Shopify is everything you need to sell anywhere”? Are you just another app for work teams or are you the “digital headquarter”? That’s your value proposition, right there. The more memorable it is, the better.

As David Ogilvy wrote in Ogilvy on Advertising, “It isn’t the whiskey they choose, it’s the image.”

P.S. I wrote about how Jeff Bezos “framed” Amazon with their Day 1, customer-obsessed approach in my previous article. That’s another brilliant example of framing as a marketing practice.