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Why charging $12/year converts higher than $9.99

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Re: Why charging $12/year converts higher than $9.99

#11

Post by msuster »

swores wrote: post #2

Is the reason that $12 converted better than $9.99 definitely because users are able to visualise it as one dollar a month? Maybe people see the .99 and are trained to think "99 cents is a marketing plan to make me think it's cheaper than it is", thus causing it to have the opposite effect? Maybe people see $9.99 as a generic price, implying it was picked fairly randomly, whereas $12 is a slightly odd number to chose…

Watch the show. He talked about trying $13.99 and other price points. Nothing converted better than $12.

Re: Why charging $12/year converts higher than $9.99

#12

Post by imcqueen »

swores wrote: post #2

Is the reason that $12 converted better than $9.99 definitely because users are able to visualise it as one dollar a month? Maybe people see the .99 and are trained to think "99 cents is a marketing plan to make me think it's cheaper than it is", thus causing it to have the opposite effect? Maybe people see $9.99 as a generic price, implying it was picked fairly randomly, whereas $12 is a slightly odd number to chose…

And do you think $12 converts better than $12.00? It sounds minor but I bet it makes a difference.

In my experience we typically do round dollar amounts and drop the ".00", but maybe that helps explain why 9.99 loses to 12. How would 10 vs 12 do?

Re: Why charging $12/year converts higher than $9.99

#13

Post by v21 »

Waywocket wrote: post #10
linuxhansl wrote: post #6

Speaking from personal preference: I always prefer "honest" numbers like $1, $10, $12, $60, etc, rather than marketing number such as $0.99, $9.99, or even $55.59 (they seem sleazy and to an extent insulting - as if I cannot work out that $9.99 is almost identical to $10).

So does almost everyone, when asked. The depressing thing is, when it comes to actual results, the x.99 pricing still works (well, I read this on the BBC a couple of months ago - don't have the link but the study they were quoting sounded pretty convincing).

The £.99 pricing also makes people in shops operate the till every time to make change, preventing theft.

Re: Why charging $12/year converts higher than $9.99

#14

Post by thomaspaine »

What's the best way to test out different pricing plans without pissing off your users? Seems hard to a/b test because if anyone is actually talking about your company, people are going to be confused that the landing page tells them $10 when all their friends and blog posts say $8.

Re: Why charging $12/year converts higher than $9.99

#15

Post by mixmax »

aresant wrote: post #4

Great headline, converted me. Price elasticity testing is so crucially important and I consume everything I can find about rationality vs. the seeming randomness (particuarlly for digital products). Even this single morsel tying rationality of consumer mind-set of $1 per month is interesting.

I wrote a blogpost about price elasticity a long time ago that you might find interesting:http://www.maximise.dk/blog/2009/01/getting-product-pricing-...

Re: Why charging $12/year converts higher than $9.99

#16

Post by zizee »

aresant wrote: post #4

Great headline, converted me. Price elasticity testing is so crucially important and I consume everything I can find about rationality vs. the seeming randomness (particuarlly for digital products). Even this single morsel tying rationality of consumer mind-set of $1 per month is interesting.

Agreed, the headline was great.

If you like articles about pricing, I read a really good one last night: http://onstartups.com/tabid/3339/bid/37737/Secrets-Of-Freemi...

Care to share any good articles you have read recently?

Re: Why charging $12/year converts higher than $9.99

#17

Post by jayliew »

swores wrote: post #2

Is the reason that $12 converted better than $9.99 definitely because users are able to visualise it as one dollar a month? Maybe people see the .99 and are trained to think "99 cents is a marketing plan to make me think it's cheaper than it is", thus causing it to have the opposite effect? Maybe people see $9.99 as a generic price, implying it was picked fairly randomly, whereas $12 is a slightly odd number to chose…

Reminds me of this: http://www.inc.com/guides/201101/guide-to-the-ABCs-of-pricin...

Re: Why charging $12/year converts higher than $9.99

#19

Post by zaidf »

In one of my landing pages for a product, I showed a Starbucks cup with its price. And next to it I showed my service's price--less than the price of one visit to Starbucks.

I had a similar idea: help people establish a frame of reference. Alas, I got too busy to actually go live with it.

Re: Why charging $12/year converts higher than $9.99

#20

Post by jdludlow »

thomaspaine wrote: post #14

What's the best way to test out different pricing plans without pissing off your users? Seems hard to a/b test because if anyone is actually talking about your company, people are going to be confused that the landing page tells them $10 when all their friends and blog posts say $8.

There was an interesting HN story a week ago that covered A/B price testing.

http://news.ycombinator.com/item?id=2143554

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