Category Archives: Psychology

Premium Currency vs Real Money Purchase

I’ve just written a reasonably long post on a LinkedIn group that I now realise only has 36 members. Since I think my Words and Opinions are Important, I wanted to share it to a slightly wider audience.

The question was on the use of virtual currencies vs real money in-app spending…

[Has] anyone run into any good public domain discussion of the tradeoffs involved in one approach rather than other, and how best to combine them?

I don’t think I’ve ever seen a proper discussion around when to use hard currency and when to real money purchase (RMP).

I’ve read a few behavioural economics books that suggest that people feel the “sting” of a purchase less the further you can abstract it away from cash (why buying an expensive thing on card is less painful than counting out dozens of £20 notes). I think Predictably Irrational might be one of them, the other is Happy Money.

Another benefit of virtual currencies is the trick of selling currency in different denominations to the amount it’s used (for example selling a 1,000 Gold bundle, when the most expensive thing the player can buy is 900 Gold), leaving them with unused currency they feel they should use. Personally I think this is quite a dirty trick and I know certain audiences are very wise to it and turned off by it, but again I’ve never seen any research to suggest how negative a reaction this would get.

Yet another benefit would be that a currency transaction can complete without friction as long as the player has enough currency. Whereas a RMP will almost always go through some kind of “are you sure?” / password flow that would introduce friction (and depending on where the purchase is happening in your game could cause problems – for example in the middle of a multiplayer firefight you wouldn’t want to be asking for passwords).

Benefits of RMP would be that you’re guaranteeing a conversion (rather than players using stored up currency). This is the thinking behind “coin doubler” style purchases – they make sense as an investment for a grinding player who otherwise would’t spend.

Using RMP for bundles of in-game items, or “early bird” bundle sales also makes sense in terms of trying to encourage that important early conversion to switch the player’s self image over to “I’m the type of person who spends in this game”.

Another downside of RMP on a lot of devices you’re limited as to what values you can choose too – for example on iOS the cheapest an item could be is $0.99 – which could make them very bad value. I think this is why you rarely see RMP used for consumable items, whereas it’s used more for durables – the value proposition. Also running discounts on RMP is slightly more trouble, as you have to create two identical items with different costs and point players to the correct one, rather than just removing a different amount of currency.

Would love to hear there peoples’ thoughts on this stuff.

What’s Worth More in Retail, £5.50 or a Happy Customer?

So, here I am trying to buy just over £300’s worth of furniture from an online retailer. Nothing terribly unusual about that – I’ve spent way more in single online orders in the past, I consider myself a pretty confident online shopper, and this is a well known UK retailer.

There are a couple of things about this transaction that are really rubbing me up the wrong way though.

Firstly, I keep getting error pages during the checkout process. The last time this happened was during the “taking our payment” stage, which has left me not entirely sure if the order’s been placed or not. (The website being so flaky at the moment, I’m not entirely sure I trust the accounts / your orders section.)

The error page also has a line on it saying that if I’d like to place an order, I can phone them up. Calls will cost at least 5p per minute. Now hang on, why on earth would you charge your customers for the privilege of buying something from you? Ok there are certain cases where I can see the benefits of this, but really only if you charge your customers a lot so buying from you becomes a desirable status symbol. Charging a small overhead just makes me feel like you’re penny pinching.

I have no idea how long the order call would take. My experience of corporate phone lines makes me think 5-10 minutes of being on hold, followed by 5 minutes for the order. But maybe the computer system is misbehaving for their phone staff as well, so the call will either be wasted, or take much longer. But I’m going to estimate that placing my £300 order would cost me somewhere between 50p and £1.

Similarly, I am being charged £5 for delivery. This is a flat fee, and doesn’t scale depending on the number, size, or weight of items I’m buying. Again, it’s possible to look at this as “wow, having two pieces of heavy furniture delivered for so little is a bargain”, but since I don’t really have any anchor here I’m seeing it as “wow, I’m spending £300+ and they’re trying to stiff me for an extra £5”.

So overall my opinion of this retailer has plummeted, mainly through the perception that they’re trying to unfairly add an extra 2% cost on to my order.  User experience – it’s not all about the colour of buttons, you know.