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$99 vs. $97 or $199 vs. $197

by OnlineAddict
50 replies
Anyone tried the difference? A lot of products on clickbank end with the number 7, is it some magic number to make people buy, compared to 9, for example? Anyone tried both options and compared the results? I'm sure its different between cheap and expensive product, as with cheap products you may "fool" the customer into buying using these kind of tricks, while expensive product customers may be "smarter" than that. But I never tried 7, so I can't tell...
#$197 #$199 #$97 #$99
  • Profile picture of the author Sean Erickson
    I don't care what the price is... if the product is good, I am in and if it is crap... let it be $1, i won't waste a second more on it.

    Basically, $97 sounds a bit cheaper than $99 or $100. It's been one of those big marketing myths that still exists today. Wonder who started it lol.

    Sean.
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    • Profile picture of the author OnlineAddict
      Originally Posted by Sean Erickson View Post

      I don't care what the price is... if the product is good, I am in and if it is crap... let it be $1, i won't waste a second more on it.

      Basically, $97 sounds a bit cheaper than $99 or $100. It's been one of those big marketing myths that still exists today. Wonder who started it lol.

      Sean.
      We, affiliates or vendors think completely different than regular customers. Its kind of a bad thing, because after all those years, its hard to "think" like a regular customer does. I remember when I was buying stuff online before I became an affiliate...I had no clue about so many things...I wish I remembered more of those days and the way I used to think online.
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      • Profile picture of the author cbader
        Originally Posted by OnlineAddict View Post

        We, affiliates or vendors think completely different than regular customers. Its kind of a bad thing, because after all those years, its hard to "think" like a regular customer does. I remember when I was buying stuff online before I became an affiliate...I had no clue about so many things...I wish I remembered more of those days and the way I used to think online.
        I remember at one time reading all the copy, even if it was really long. After you buy for a while, you end up just scrolling quickly to get the jist of it.
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    • Profile picture of the author DubDubDubDot
      Originally Posted by Sean Erickson View Post

      It's been one of those big marketing myths that still exists today. Wonder who started it lol.
      It began with WalMart experimenting with the sales psychology of pricing. They have long since dumped the practice, but low level marketers have retained the model.

      $99.95 instead of $100 is fine. $94.74 instead of $99.95 is pointless.
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  • Profile picture of the author kenzik
    I think most people will either tell you an opinion on which they consider the best (based on experienced or data) or to simply test and measure.

    I believe the latter will always give you the best result.
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  • Profile picture of the author Sean Erickson
    By the way, @OA, this has been discussed for a very long time now and there are over a hundred threads on this myth
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    • Profile picture of the author David-JP
      I remember reading a report done on a major retailer that did price testing and the 97 ending performed better than the 99. Dont remember the details- but it was no myth.

      That being said- test it. Chances are you wont notice much of a difference between $97 and $99, but you never know till you test.

      David
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  • Profile picture of the author MarketingMinded
    Just pick a price, if you provide a high level of value the price won't matter.
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  • Profile picture of the author Sarevok
    Never assume you know how things will end up.

    I advise to always split test..
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  • Profile picture of the author bsbear
    7 is like that subliminal most 'randomly' chosen number. Forget where I read that. Pretty sure that's why it works.
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  • Profile picture of the author DavidG
    lol...

    197 is better than 200. It's been proven that people feel less pain giving 99 cents than giving 1 dollar.

    It's a very subtle but proven psychological thing.

    In the end, if you see it often then it works for some reason.
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    • Profile picture of the author OnlineAddict
      Originally Posted by DavidG View Post

      lol...

      197 is better than 200. It's been proven that people feel less pain giving 99 cents than giving 1 dollar.

      It's a very subtle but proven psychological thing.

      In the end, if you see it often then it works for some reason.
      Yes, 197 and 200 is very different, obviously. But what about 197 and 199?
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      • Profile picture of the author Claude Whitacre
        Originally Posted by OnlineAddict View Post

        Yes, 197 and 200 is very different, obviously. But what about 197 and 199?
        I've done extensive testing (at retail and online) between prices like $99, $95, and $97. $97 is the most profitable, but the difference in number of sales is small.

        I would test $97 VS $197. Now, there you would find a huge difference in profit. Maybe either way. Or $197 and $397.

        In the late 1980's I was selling vacuum cleaners in people's homes. I decided to test my selling price. I cold canvased (so nobody knew each other), and every month I raised the price a few hundred dollars to see the results. I was the only one selling at these different prices (I would never let a sales crew try this. It would kill them)

        The entire country was selling this machine for $899 at the time. So I started at $499 (I think), then $699, $899, $999, $1,299, $1,499, $1,799.

        My cost was always the same. I sold 45% of the people I talked to at $499. The same with $699. But I still sold about 35% at $1,499. At $1,799 my sales crumbled and I made less money. I made the most money at $1,499. I felt guilty, and lowered it back down to $999. But the lesson was learned. Price elasticity is far more than we might imagine.
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        • Profile picture of the author Alexa Smith
          Banned
          Originally Posted by Claude Whitacre View Post

          In the late 1980's I was selling vacuum cleaners in people's homes.
          Oooh, you're older than you look.

          Originally Posted by Claude Whitacre View Post

          My cost was always the same. I sold 45% of the people I talked to at $499. The same with $699. But I still sold about 35% at $1,499. At $1,799 my sales crumbled and I made less money. I made the most money at $1,499. I felt guilty, and lowered it back down to $999. But the lesson was learned. Price elasticity is far more than we might imagine.
          Thanks for a very interesting post. (I suspect your overall sales figures must have been way above average, among your colleagues?).
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          • Profile picture of the author Claude Whitacre
            Originally Posted by Alexa Smith View Post

            Oooh, you're older than you look.

            Thanks for a very interesting post. (I suspect your overall sales figures must have been way above average, among your colleagues?).
            Dear Alexa: I'm 57. You have to remember that all photos show what you looked like...sometime in the past.

            My sales figures were high. When I speak at vacuum cleaner dealer conventions (Yes, they exist), people are afraid to talk to me. I had a lady whisper to me at an event "You're a rock star". I said "Only in this room".
            By the way, take me out of the sales arena, and I'm useless. So don't be too impressed.
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            • Profile picture of the author Pole
              Yeah, I guess it looks cheaper to many people. It's basically like the whole $x.99 deal with common consumers. Try it out if you want to know if it works or not for sure.
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        • Profile picture of the author OnlineAddict
          Originally Posted by Claude Whitacre View Post

          I've done extensive testing (at retail and online) between prices like $99, $95, and $97. $97 is the most profitable, but the difference in number of sales is small.

          I would test $97 VS $197. Now, there you would find a huge difference in profit. Maybe either way. Or $197 and $397.

          In the late 1980's I was selling vacuum cleaners in people's homes. I decided to test my selling price. I cold canvased (so nobody knew each other), and every month I raised the price a few hundred dollars to see the results. I was the only one selling at these different prices (I would never let a sales crew try this. It would kill them)

          The entire country was selling this machine for $899 at the time. So I started at $499 (I think), then $699, $899, $999, $1,299, $1,499, $1,799.

          My cost was always the same. I sold 45% of the people I talked to at $499. The same with $699. But I still sold about 35% at $1,499. At $1,799 my sales crumbled and I made less money. I made the most money at $1,499. I felt guilty, and lowered it back down to $999. But the lesson was learned. Price elasticity is far more than we might imagine.
          This is an awesome example. I have also seen that the sales ratios don't change with the price being much higher, on some products. Actually, nowadays people are so scared to buy stuff online(with all the scams going on), that they would rather pay $500 for a product when you make them believe its 100% legit than $200 and risk being scammed. Sometimes its really hard to convince people of a product being legit and thats actually my main concern lately. My marketing goes towards looking trustworthy, I realized I can charge more than the competition this way. The easiest way to look trustworthy is talking about the product negatives, too.
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  • Profile picture of the author WillR
    Split test. That's the only answer I can give you.

    No one here knows what will work best for your customers. Some markets will prefer the $97 price point and others will convert better at $99. It's something you need to test.
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  • Profile picture of the author O0o0O
    This is interesting:

    Television prices end in 5's: it's $19.95
    Internet prices end in 7's: it's $27
    Bulk Store prices end in 8's: it's $12.98
    Retail Store prices end in 9's: it's $1.99
    Auction start prices end in 1's: $7.01

    Maybe they design it like that based on how the people are feeling at that particular time?

    I think I got it:... They design the prices based on the likelihood of them buying impulsively. So the rule might be: "The more likely they are to impulse buy, the higher we will start out the one's digit.. Let's test out this theory:

    Least Likely To Impulse Buy - Television $19.95
    Somewhat Likely To Impulse Buy - Internet $27
    Likely To Impulse Buy - Bulk Store $12.98
    Very Likely To Impulse Buy - Retail Store $1.99
    Most Likely To Impulse Buy - Auctions $7.01

    Hmm... I think we might have a theory going on! What do you guys think?
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  • Profile picture of the author Silas Hart
    "Back in the day" businesses used this as a sale. $1.00 to $0.97 which meant a lot. Then the tactic was to slowly decrease the amount of goods being offered. Distributors would sell a 12oz bottle of whiskey for $1.00, and then mark it down to $0.97 and the businesses would usually use this as a sale to be passed on to their customers as 0.99 was an indicator that they were dropping prices to be competitive and to lower prices for their customers. Then the distributors would slowly start shipping out 10oz bottles. This is really common in fast food during the 90s.

    Marketing adopted psychological meaning behind it and started testing it and it showed that for some items with demographics, that you could sell an item priced at 9.97 10 times while you might only sell something for 9.99 only 4 times, and only 1 time for something priced at 10.00.
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  • Profile picture of the author OnlineAddict
    O0o0O and Silas Hart, some interresting reading there...makes me think.
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  • Profile picture of the author Andyhenry
    Try the forum search function this question has been asked before and had a lot of good answers.
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    nothing to see here.

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    • Profile picture of the author Tom B
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      Originally Posted by Andyhenry View Post

      Try the forum search function this question has been asked before and had a lot of good answers.
      Easy for you to say, I got nothing relating to price when I searched on "7". :p
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  • Profile picture of the author Raydal
    What about gas stations who set their
    prices at $3.85.9 per gallon. Why the 9/10 cents extra?

    I guess it looks a lot cheaper than $3.86 per gallon, along
    with just plain habit.

    -Ray Edwards
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    • Profile picture of the author sadneck
      Originally Posted by Raydal View Post

      What about gas stations who set their
      prices at $3.85.9 per gallon. Why the 9/10 cents extra?

      I guess it looks a lot cheaper than $3.86 per gallon, along
      with just plain habit.

      -Ray Edwards
      Raydal, well I think you may be right, I also think gas prices are just set at whatever they think they can possibly get the most for it. Long weekends, gas prices do go up. Lots of people driving and planning to leave the city. Some of those forget to fill up on gas...

      Andrew
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    • Profile picture of the author DubDubDubDot
      Originally Posted by Raydal View Post

      What about gas stations who set their
      prices at $3.85.9 per gallon. Why the 9/10 cents extra?

      I guess it looks a lot cheaper than $3.86 per gallon, along
      with just plain habit.
      I don't know the history behind 9/10ths at gas stations, but I would put money on it originating from one gas station (or a certain chain) than wanted a slight edge over their competitors.
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  • Profile picture of the author Alexa Smith
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    Originally Posted by OnlineAddict View Post

    Anyone tried the difference?
    Not $97/$99.

    I had a client a long time ago who split-tested whether the copy I'd written sold his product better at $39 or $37. $39 sold more copies from the same traffic, and the difference was statistically significant. Whether that means anything helpful to you is a different matter altogether, though.

    In all the split-testing results I've actually seen myself the figure ending in "7" has always converted worse.

    Exactly the opposite to what's generally assumed.

    http://www.warriorforum.com/main-int...ml#post3656044
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  • Profile picture of the author jbsmith
    For me it was not a myth - prices ending in a 7 outperformed the same price point ending in a 9...can't say that will always be the case, but I keep all of mine at a 7

    You need to test your pricing and your messaging - you should be doing your own split tests for this type of thing.

    Jeff
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  • Profile picture of the author Silas Hart
    On eBay, most of my listings end in 47. My theory behind this is that two relatively low digits are the last numbers read from left to right. I've split tested with .99 and .98 and I have always got the best results at .97, I of course get really good conversion rates at 47, but its almost a "different ball game" because of the price difference from .97 when dealing with physical items. However 11.99 can become 12.47 and still have similar amounts of purchases for non-competitive items on eBay.
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  • Profile picture of the author kazim
    I think price in not a matter for good products.
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  • Profile picture of the author davepilgrimus
    Buy things in here or buy a WSO because if it isn't any good people will let you know in the forum in that you can read their comments.
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  • Profile picture of the author Pole
    Well, it's basically the whole $x.99 situation again. It seems cheaper, and it is no myth. I recommend you try it to truly see the results.
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  • Profile picture of the author Pcity
    I think it has something to do with psychology, people want to know they are getting the most value out of a product or service so in the consumers mind, 97 sounds better than 100.
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    • Profile picture of the author Claude Whitacre
      Has this ever happened to you?

      You buy something for $5.99, pay with a $10 bill, and wait for your $5 in change?
      I mentally forget the cents when doing math.

      By the way. I have done testing at the $129 VS $97 price point. There is a huge difference (maybe 30% less sales) at $129. But you have to figure in your cost of delivery (if there is one) in determining which way to go.

      When I give seminars and people are paying for hotel rooms. A rate of $99 a night seems to be the cut off. If the room is $139 a night, there is much more resistance to staying there.
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  • Profile picture of the author DarioMontesdeOca
    Ryan Deiss has done extensive testing on this.

    As far as I can remember $97 outperformed $47 and $99. What's crazier was he added TWO payments of $97 and it outperformed the single payment of $97.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by DarioMontesdeOca View Post

      Ryan Deiss has done extensive testing on this.

      As far as I can remember $97 outperformed $47 and $99. What's crazier was he added TWO payments of $97 and it outperformed the single payment of $97.
      I've seen a similar thing in my own testing. Three payments of $299 way outperforms one payment of $699. As long as the offers are sent to different people.

      If you offer these two options to the same person (on an application) they nearly always take the $699.

      I now sell a service for $3,999 or 9 payments of $699 (and $199 a month after, either way). By far, my best results come from pitching the offer at $699 a month, and then giving the offer of the upfront $3,999 (They save $500 by doing that) on the application.

      Why? I'm not 100% sure, but I think it's because they are used to paying about that price for most forms of advertising. So it fits. And I know they are thinking of it as "a $699 decision" VS "a $3,999 decision".
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  • Profile picture of the author celente
    you just answered your own question.

    1) Test all the different price points.

    2) you will work out a sweet spot where I call it piggy in the middle, where by you will get the best price per order area. YOu may have to test a bit, but it will be well worth it in the end. :-)

    Love the Ryan Deiss payment test, and if you see that video he explains the psychology of 7's (which seems to always outperform) and also why he tested this, and also why it the thought it worked.
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  • Profile picture of the author daedhrogon
    I personally hate the 97, 99, 95, 99.99, and so on prices. But you should do some split test and see what's working better for your users
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  • Profile picture of the author Darnscotty
    Seven is seen as a magical number when pricing a product. I have heard (not sure if it is true) that people tend to buy products easier that end on a 7 or is $7. For instance, $14.97 will get more sales than $14.99. I haven't tried it myself, but for some reason $14.97 just feels better to buy with than $14.99... My honest opinion though
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  • Profile picture of the author garveyonweb
    Phychological pricing has been around just as long as retailing. .99c works better than 1.00. It has been proven over and over again.... but it makes no intelligent sense. Sceptics who don't believe it have also been around just as long.
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  • Profile picture of the author Justin W
    A lot of mixed advice on this one. This is why I go with the "split test" crowd. After all, the product itself could be a factor in what converts better.
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  • Profile picture of the author IMDealBox
    Numbers Ending in 9 are better when using decimals...like 14.99..

    But when using numbers without decimals, those ending in 7 are best: $17 - $47 - $97

    Typical sales funnel!
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    • Profile picture of the author johnbruce
      Ok!
      The reason is that there is no number bigger than 9. If you multiply 9 with any number than add the numbers with each other the result will always be 9

      Say 9*1245632 = 11210688
      Now ad numbers =1+1+2+1+0+6+8+8 = 27 = 2+7 = 9

      As far the number 7 is concerned i think it is a universal number. In my belief the number 7 is the number of angels, heaven, earth.
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  • Profile picture of the author Randall Magwood
    The "7" ending has always worked for me better than the "9" ending. It's all perception.
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  • Profile picture of the author charidemos
    I see the number 7 in digital products a lot, but I see the number 9 in physical products a lot too. not sure what's the difference but if companies do it, it works
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  • Profile picture of the author MKaren
    Originally Posted by OnlineAddict View Post

    Anyone tried the difference? A lot of products on clickbank end with the number 7, is it some magic number to make people buy, compared to 9, for example? Anyone tried both options and compared the results? I'm sure its different between cheap and expensive product, as with cheap products you may "fool" the customer into buying using these kind of tricks, while expensive product customers may be "smarter" than that. But I never tried 7, so I can't tell...

    When the price is 99, clients always say "that product is worth 100$" while when its 97$ clients always say "that product is worth $90 more or less" ..pricing has psychological impact to costumer..
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  • Profile picture of the author Aegir
    Magic numbers are 5, 7 and 9.
    Otherwise known as charm prices.

    William Poundstone in his book Priceless revealed that from 1987 to 2004, eight charm price studies revealed, that prices that used the number 9 as the last digit boosted sales by an average of 24% relative to nearby prices. ($49, $79, $99, $1.49 etc).

    In Priceless he detailed a study where there were more sales using the charm price of $39 than even at the cheaper $34 or any other non charm price tested.

    The reason why charm prices work is because we encode the price in our minds before we read all the digits.

    We encode a price like $7.99 as $7 because we read numbers from left to right.

    This is called the Left-Digit Effect.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by Aegir View Post

      Magic numbers are 5, 7 and 9.
      Otherwise known as charm prices.

      William Poundstone in his book Priceless revealed that from 1987 to 2004, eight charm price studies revealed, that prices that used the number 9 as the last digit boosted sales by an average of 24% relative to nearby prices. ($49, $79, $99, $1.49 etc).

      In Priceless he detailed a study where there were more sales using the charm price of $39 than even at the cheaper $34 or any other non charm price tested.

      The reason why charm prices work is because we encode the price in our minds before we read all the digits.

      We encode a price like $7.99 as $7 because we read numbers from left to right.

      This is called the Left-Digit Effect.
      I've never read that before. It makes sense. Thanks for sharing it.
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  • Profile picture of the author Deepak Media
    only way to find out - split test.

    no one can have a benchmark because it will differ with the market and demographic.
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  • Profile picture of the author Aegir
    A markets sensitivity to price changes is heavily influenced by their memory of the prices they have previously paid or seen.

    Thus the first time your prospects go to purchase is critical for the price they are willing to pay now and in the future...
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