Pricing Psychology

I was led to believe that pricing a product at £7.99 for example, was to force the cashier to put the money in the cash register so that they would have to give the customer change and not be tempted to pocket the money themselves.

I'm in the process of building my online shop and having second thoughts about pricing my product at £7.99. I prefer £8 myself. I think it's more honest, I'm not trying to deceive the customer into thinking it's a whole pound cheaper!

What are your thoughts, £7.99 or £8?

Thanks

 

[mitch@volume]

£x.99 always sounds cheaper.

imo even more so on high value items "this one is under £500!" etc

 

[Kernowman]

It has always been so that "£7.99" is perceived to be less than "£8.00" in the mind of the consumer because they see the first figure and it registers as £7.00.

Walk round any car dealer's forecourt and inevitably every price ends with a "9" like £4999 or £8499. As an education, go to PC World and if can find any of their prices that does not end in "99" then you win a sweetie

Few people pay by cash these days so there is no scope for the cashier to open the till to give a 1p in change

 

[mangoprint]

.99 all the way!

 

[Morgy]

I read somewhere years ago that people are more likely to buy something with a 7 in it - hence Asda prices are £x.97 - Not sure how true this is

 

[KidsBeeHappy]

Walk round any car dealer's forecourt and inevitably every price ends with a "9" like £4999 or £8499. As an education, go to PC World and if can find any of their prices that does not end in "99" then you win a sweetie

Ha, you don't know the secret PC world pricing code - there are in fact lots of items that end in 97p, and that means that they're discontinued stock lines that they're clearing out

 

[Kernowman]

Ha, you don't know the secret PC world pricing code - there are in fact lots of items that end in 97p, and that means that they're discontinued stock lines that they're clearing out

I'm not entirely sure now you have let the cat out of the bag if you qualify for that sweetie

 

[estwig]

I always put the 'lucky number seven' in my prices, not that I'm superstitious of course, but it works.

 

[Scott-Copywriter]

I was led to believe that pricing a product at £7.99 for example, was to force the cashier to put the money in the cash register so that they would have to give the customer change and not be tempted to pocket the money themselves.

I'm in the process of building my online shop and having second thoughts about pricing my product at £7.99. I prefer £8 myself. I think it's more honest, I'm not trying to deceive the customer into thinking it's a whole pound cheaper!

What are your thoughts, £7.99 or £8?

Thanks

You're not deceiving anyone, you're just attempting to increase your sales.

Customers don't mind at all and don't even realise, so you can either stick to your morals and potentially lose some money, or use the technique and possibly increase your profit slightly.

Take your pick.

 

[directmarketingadvice]

I read somewhere years ago that people are more likely to buy something with a 7 in it - hence Asda prices are £x.97 - Not sure how true this is

I split-tested prices ending in 7 for a client last year.

Surprising results.

Steve

 

[Morgan]

I split-tested prices ending in 7 for a client last year.

Surprising results.

Steve

Surprising in a good way??

 

[directmarketingadvice]

Surprising in a good way??

Surprising in an emotionally uninvolved way.

Steve

 

[the_agx]

Write on the price labels:

£8.01
(small font): That's right, mother****er.

 

[Liybpg]

I think X.47 or X.97 are good numbers because consumers are now more used to rounding up X.99 and X.97 or X.47 is more unusual, thus more likely to seem like X.0 rather than (X+1).0

If it is something like 4.37, I think most people will think: it was 4 pounds something (i.e. pretty much 4 pounds), so I think if you want to increase your prices a little bit from 4 pounds, you can up it to 4.37

IMHO of course

 

You're not deceiving anyone, you're just attempting to increase your sales.

Customers don't mind at all and don't even realise, so you can either stick to your morals and potentially lose some money, or use the technique and possibly increase your profit slightly.

Take your pick.

When I worked in retail, I quoted a customer "£259.99." He pulled me on why I didn't just say £260?

£8 is a simple price; a bit like the winner of Young Dragon's Den who sold a bottle of water for 50p. Simple product name and one coin to hand over without all the fuss of change.

...£8.37, now that's getting expensive

£7.97 is a price tag set by those annoying eBay sellers who want to undercut everyone and game the best match system. Nice ring to it though....

 

[Phild1973]

We have all been conditioned since birth to react to the .99p as it always appears to be cheaper which particularly for consumers is a purchase trigger. Smart business purchasers however look at a total purhase cost much more, to include carriage costs, so it all depends on who you sell to.

 

[Scott-Copywriter]

When I worked in retail, I quoted a customer "£259.99." He pulled me on why I didn't just say £260?

How many customers didn't mention it before and after he did? Did he end up buying the product anyway? If not, do you think it had anything to do with the 99p?

You're always going to get bizarre folk who make a fuss over minor things like that. However, they're not worth changing your pricing structure over when it could end up reducing your overall profit.

Sales is the most important element here, and for one person who has a moan, there will be hundreds of others who don't even bat an eyelid. If you change your pricing structure so you can say 'well I just provide simple and honest prices' whilst a the next competitor along is using the technique to increase their profit, then who wins?

 

While he was talking I'm thinking "grumpy awkward **** , go **** yourself and get a life, but you do have a point."

Asda sell a range of products for £1 flat, I'm thinking bargain, but as every major retailer uses the .99 who am I to second guess it or have they simply copied each other over the years? When was the last independent research into this??!!

 

[Scott-Copywriter]

While he was talking I'm thinking "grumpy awkward **** , go **** yourself and get a life, but you do have a point."

Exactly . You'll always get those very rare strange people who want to make a fuss over something which virtually no one else really cares about.

[/QUOTE]Asda sell a range of products for £1 flat, I'm thinking bargain, but as every major retailer uses the .99 who am I to second guess it or have they simply copied each other over the years? When was the last independent research into this??!![/quote]

When you get into smaller figures, you'll find that it starts to make less of a difference. £1 is a very small amount of money, so people won't look at the 99p and say 'wow it's only pennies'. The technique works far better when you're looking at tens or hundreds of pounds, so £40 becomes £39, or £200 becomes £199.

To know for sure, you would have to split-test. Sell some products for rounded up prices, then change them to .99 or .97 and see if it makes a difference. Steve said that he split-tested it for a client with surprising results, so it could be worth testing on your own product range.

 

[silvermusic]

We have all been conditioned since birth to react to the .99p

Some of old codgers remember using real money before this new fangled decimal stuff came in, 3d became 1 new pence and a shilling was worth 5 new pence, pah, what was all that about, my pocket money didn't go up.

 

[crossdaz]

It depends who you are selling to.
Personally, it makes no odds to me but to some people it may be the most important thing in the world.

Overall, unless you are selling major volumes I doubt it's going to make much odds but you'll get a more accurate picture of what works by looking at amazon. They will have tested it to infinity - on a forum you are only ever going to get personal preferences.

 

[captaincloser]

Does anyone still charge in guineas ? (£1.O5). Very cool.

I think maybe doctors were the last to do that..

 

[KidsBeeHappy]

Interesting though that when most countries moved over to the Euro that they completely ditched the cents off the pricing, and just priced in straight euros, and didn't go back. even though in times of recession where you'd think that every tatic possible would be used if it converted more sales.

Maybe our consumers are becoming a bit more educated.

 

[Scott-Copywriter]

People need to bear in mind that this world on an emotional level as opposed to a logical level. They don't see it and think 'oh this £7.99 product is only £7, not £8'. It simply looks cheaper and feels cheaper. It helps the most when someone's attention is caught by a product and they first lay eyes on the price. Sure they might logically round it up to £8 eventually, but it still feels like a £7 item.

Funny how it works, but it does.