"geoduck clam", ha.
A Penny Saved: Psychological Pricing
21–30 of 46 posts
Re: A Penny Saved: Psychological Pricing
#22I am hesitant about the value of the data in the chart. It sounds like out of all the products sold via Gumroad, the .99 products convert better than the .00 products. Couldn't that just mean that the sellers who use .99 are savvier with pricing and probably also doing other things to market their products better?
Better data would be the same product sold in .99 and .00 versions. I imagine the conversion rate differences wouldn't be so dramatic in that chart.
Re: A Penny Saved: Psychological Pricing
#23Earlier quoted context omitted.
That's why A/B testing is always a good idea. Try it both ways and see which converts better.
I'd love to but I don't have enough traffic to conclude this in faster than like, a year.
In that case make your best educated guess and focus on something that matters a lot more to your business right now - driving more traffic to your business.
Re: A Penny Saved: Psychological Pricing
#24Interestingly, in Australia where taxes are in the sticker price, most retail prices are .99 or .95. When I was in the US, where the taxes mean you have no idea what the checkout price will be, it was weird to see so many prices at .29, 39, .59 and so on. I assume it was tax-related, because forking over cash and getting shitty amounts of coins back is not something that's common in Australia, but a necessity of the…
It's tax-related, but also because every state, city, and county can add their own sales taxes, so the only way to advertise prices for a national chain is by excluding sales taxes. As a result most businesses, even just local ones, follow suit. And the taxes can change after any government budget meeting or vote. Plus, many retailers attempt to keep pace with or beat inflation, so prices tend to slowly rise, by pennies at a time.
Re: A Penny Saved: Psychological Pricing
#25I am hesitant about the value of the data in the chart. It sounds like out of all the products sold via Gumroad, the .99 products convert better than the .00 products. Couldn't that just mean that the sellers who use .99 are savvier with pricing and probably also doing other things to market their products better? Better data would be the same product sold in .99 and .00 versions. I imagine the conversion rate differ…
Good point. I'm sure studies have been done and merchants set such prices accordingly.
This guys appears to have reviewed a number of studies and concurs. BUT...he also thinks that "round" pricing may support luxury branding better. That's partly why you probably can't do simple pricing difference between the same product at the same store.
http://www.sciencedaily.com/releases/2011/09/110906144036.ht...
More about the topic: http://www.quora.com/Pricing/Do-prices-at-99-instead-of-1-00...
Re: A Penny Saved: Psychological Pricing
#26As a consumer I'm pretty aware of this tactic. I probably still fall for it, but I also notice and think better of sellers that don't use it.
Re: A Penny Saved: Psychological Pricing
#27I always round prices up that end with .9x. On Kickstarter when prices are $79 I count them as $80. Saving me that minor calculation makes me more likely to buy something, it simply removes an annoyance. Is that really un-normal?
Re: A Penny Saved: Psychological Pricing
#28Any idea why Wal-Mart uses .88 in their pricing?
Re: A Penny Saved: Psychological Pricing
#29Earlier quoted context omitted.
Me too. I know I'm in the minority with this, but I much prefer to do business (repeatedly) with a firm that isn't employing bullshit tactics. It would be interesting to see a study that reflects the whole cost-per-customer, since resorting to such pricing tricks means you're inevitably attracting consumers who are extremely price driven and who may be harder to upsell or retain.
Interestingly even Apple does this on a not-so-cheap device. http://store.apple.com/us/iphone
I think the research showing that -1 pricing works for commodity items might not hold when the customer is more discerning and thus, as in my case, values a perceived respectful attitude from the company in pricing things on the even.
Re: A Penny Saved: Psychological Pricing
#30I always round prices up that end with .9x. On Kickstarter when prices are $79 I count them as $80. Saving me that minor calculation makes me more likely to buy something, it simply removes an annoyance. Is that really un-normal?
I'm not sure. I also do this, but maybe something is happening, even to us, subconsciously.
Maybe the effect goes away if we walk away and remember the price as $80, though.