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People spend more when prices end in .99 (2018)

kenthendricks.com

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Re: People spend more when prices end in .99 (2018)

#11

Post by tracerbulletx »

throwaway13337 wrote: post #9

I never like thinking of pricing in this way. When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest. Integrity means a lot. The software I sell is priced in whole numbers. However, the magnitude of effect claimed in the article is huge. It's the difference between selling at cost and a huge margin. Between doing well and shutting down…

Retailers don't do this because of published studies. They do it because they've tested it internally for the last 40 years.

Re: People spend more when prices end in .99 (2018)

#14

Post by add-sub-mul-div »

iLoveOncall wrote: post #5
underlogic wrote: post #4

First job for all day AR glasses is to kill off this nonsense. Superimpose the rounded up price and blur the advertising out. Also add the markup so the customer knows that $2 Arizona iced tea was bought for 35c.

Actual first job for all day AR glasses will be to spam you with ads everywhere.

That's not just a flippant reply. The fundamental purpose of invention in our society is no longer about benefitting our lives.

If they invented consumer travel to Mars tomorrow I'd have no interest. In 2024 it would be stupid to believe the customer experience would take the form of anything better than the Star Wars hotel.

Re: People spend more when prices end in .99 (2018)

#16

Post by throwaway13337 »

tracerbulletx wrote: post #11
throwaway13337 wrote: post #9

I never like thinking of pricing in this way. When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest. Integrity means a lot. The software I sell is priced in whole numbers. However, the magnitude of effect claimed in the article is huge. It's the difference between selling at cost and a huge margin. Between doing well and shutting down…

Retailers don't do this because of published studies. They do it because they've tested it internally for the last 40 years.

That may be true but we don't know that it is true.

When I started my selling software, I priced with something.99 too. I did this because everyone else did. I was unfamiliar with these sorts of things so I followed on.

I am sure that in some business at some point, there was a big positive in switching to that sort of pricing.

When I switched my software to whole numbers, I did not notice a drop in sales. Things continued to grow. Of course, my business is one data point and a small one.

How much of why we tend to do this is because, historically or normally, that is how we've seen it done?

Re: People spend more when prices end in .99 (2018)

#17

Post by PullJosh »

YVoyiatzis wrote: post #10

Actually, the .99 price-point started as a clever way to prevent theft, manage inventory, and keep track of sales. The idea was that pricing something at $1.00 might tempt a cashier to pocket the bill, but pricing it at $0.99 meant they’d have to open the register to give change, reducing the risk. Back then, most registers didn’t print receipts. This method also helped with inventory control. For example, if the tot…

I don’t know if this is true or not, but it’s clever and interesting regardless.

Re: People spend more when prices end in .99 (2018)

#18

Post by apantel »

add-sub-mul-div wrote: post #14
iLoveOncall wrote: post #5

Earlier quoted context omitted.

Actual first job for all day AR glasses will be to spam you with ads everywhere.

That's not just a flippant reply. The fundamental purpose of invention in our society is no longer about benefitting our lives. If they invented consumer travel to Mars tomorrow I'd have no interest. In 2024 it would be stupid to believe the customer experience would take the form of anything better than the Star Wars hotel.

The “fundamental purpose of invention in our society” has been for military advantage more often than not.

Re: People spend more when prices end in .99 (2018)

#20

Post by neilv »

I didn't see it mentioned, but there's sometimes another factor:

When a store is selling things for .00 vs. ".99" (or any other fractional amount), I assume it's a premium-priced store. They sure aren't rounding down to those numbers.

(Or, many times when I see .00 numbers, it's slightly upscale clothing stores, who're maybe using .00 to seem more upscale, but who also have near-constant significant "sales". So if I see a .00 without a large "sale" discount, then maybe I'm there the wrong day, or someone hasn't yet been around with the price sticker gun yet that day.)

But when they're using fractional numbers, that says they're more likely targeting more pricing-sensitive buyers, and I'm also not paying for the upscale pretense.

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