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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).
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.
http://news.cnet.com/2100-1017-245631.html
One suggestion is to have your pricing page show a random price, but after the user clicks "yes please" you tell them immediately that "actually, we are having a discount today to $8", telling them the lowest price of the bunch. The danger with this is that if people find out about it, it could taint your test as they know that the displayed price is not the price they will be charged at the end.
I'd be interested to hear if people have any other good ways to tackle this. The only things I can think of ad extra variables to the equation (tainting the a/b test) e.g.: write "limited time offer" next to the cheaper prices, or run the different prices on different days.
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?
Do you think the same would hold true for an annual pricing model? For example, moving from $999/year to $1,000 or $1,200 per year.
Earlier quoted context omitted.
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.
In most US states, the listed price isn't the amount that the customer actually pays. In most retail establishments, sales tax isn't included. In most online sales, there's some shipping and handling fee.
As a result, even a "round number" price ends up being something like $12.31.
Earlier quoted context omitted.
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.
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…
My take - People see one and two and those are the two lowest numerals. Fill their brain up with nines and somewhere there are synapses firing which say that's a lot. It's not like $10 is a huge psychological barrier in the same way $1000 is.
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…
Can you divide 9.99 by 12 in your head? How long would it take? How sure would you be of the answer after 1, 2, 3 ... 5 seconds?
In that impulsive fraction of a second that you have the user about to click the button and they are battling within themselves if they can do the calculation then it increases the chances that the "buy" side will win. Being able to do the calculation easily probably also gives a reflection of friendliness and ease onto the entire rest of the service as well.
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…
My guess: it's more of a "don't make me think" type thing. Can you divide 9.99 by 12 in your head? How long would it take? How sure would you be of the answer after 1, 2, 3 ... 5 seconds? In that impulsive fraction of a second that you have the user about to click the button and they are battling within themselves if they can do the calculation then it increases the chances that the "buy" side will win. Being able to…
However, if I did care about how much $9.99/year is each month, rather than even trying to be slightly accurate, I'd round it off as "less than a dollar a month" and go straight ahead. That extra 17c/month doesn't make a difference to me.
(Obviously both my calculations speed and the amount I care about price differences when talking about that amount of money isn't neccesarily equal to that of other, possibly most other, potential customers.)
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…
I am pretty sure it's because of that, very simple, people like simple. I like simple.