Pricing Psychology

11 years ago

$9.99 > $10
$14.00 > $13.99
$17.00 > $16.99
$297 > $300

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11 years ago

Yes, $10 put it into a different price bracket.

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11 years ago

It depends. Some products actually sell more when they are perceived as more expensive. Walmart gets away with their .99 because their business model revolves around lower prices. If you're selling commodities, that will work for you too.

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11 years ago

Hi does this applicable to WSO?
Is 7 > 9?
14 > 17?

Need some feedback.

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11 years ago

I've always heard (forgot where) that ending your product in a "7" always leads to better conversion... I think that why wal-mart does it so much! See here: Why do all the direct marketers end prices in 7? - Small business forum Australia, but then again I just stumbled on to this article that states otherwise: 5 Psychological Studies on Pricing That You Absolutely MUST Read

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11 years ago

Originally Posted by Michaelocity

I've always heard (forgot where) that ending your product in a "7" always leads to better conversion... I think that why wal-mart does it so much! See here: Why do all the direct marketers end prices in 7? - Small business forum Australia, but then again I just stumbled on to this article that states otherwise: 5 Psychological Studies on Pricing That You Absolutely MUST Read

I'm seeing more and more info-products priced with a 7 at the end.

Lucky number 7, I guess???

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11 years ago

Originally Posted by Michaelocity

I've always heard (forgot where) that ending your product in a "7" always leads to better conversion... I think that why wal-mart does it so much! See here: Why do all the direct marketers end prices in 7? - Small business forum Australia, but then again I just stumbled on to this article that states otherwise: 5 Psychological Studies on Pricing That You Absolutely MUST Read

The "price ending in 7" thing started with a direct marketer/copywriter named Ted Nicholas. He wrote that in one test he did, the price ending in 7 outperformed the price ending in 9.

Several years of "Chinese Whispers" have turned that into "prices ending in 7 always outperform everything else."

As for $9.99 out-pulling $10 or $10.00, much of that can be attributed to adding another digit to the price. That's why you see houses listed at $99,900 rather than $100,000. Once you get to $100k, you're in six-digit territory.

I once read about a guy that was killing it with a "Dollar Store" until someone opened the "99 cent store" across the street.

The magic isn't in the number itself, it's in the relationship of that number to others in the marketplace. Don't try to guess the "perfect price" at launch. Test different price points until you find the one that delivers the results you want, be that volume or profit per unit or net profit.

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11 years ago

To be honest, for me I would not care if it is prices at $9.99 or $10.

Maybe the number 7 at the end does something.....

Maybe you can try $9.97.

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11 years ago

Personally, I'd rather pay $10 than $9.99, or 9.97. I already hear enough pennies that were forgotten about scraping and clanking in the dryer as it is.

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John Krone

John Krone

John Krone

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11 years ago

Interesting question and answers.
Looking at it from a different approach. The subconscious could interpret several things from the 9.99 versus the round number 10.
Such as an attempt to sell rather than provide.
Ever get a birthday card check for $9.99? Maybe from your uncle, if he's a car dealer Or is it always a generous round number?
Retail usually goes the .99 route though, so that tells me something about their research results.

Another approach is to focus on pre-framing the price, with content mention of higher priced products (of the competitions perhaps). Or just stating high dollar numbers in general in your copy, related to your subject. When they reach your offer price, it will strike the mind as small by comparison - whether it's 9.99 or 10.00.

If you don't have the opportunity to pre-frame, then I'd stick with the retail practices. They put a lot of money into research.

John
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Pricing Psychology

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