Finding the Perfect Price - Is it the Magic #7?

[Sean Marshall]

Hi All,

I've come to a wall with how to price my services. Some people say to price things online using the magic #7. As in $47 instead of $50 or $497 instead of $500.

Others say using 9 works as well. ($49 vs $50).

Still others say to make it look like there was a ridiculous amount of calculation involved and have the price be something like $48.16.

I like to think that people are smart enough to know the difference. Also, I just want to be straight up with people. Like can't I just call it $500 and people will get that I'm just being cool? Or should I really do the $497/$499/$498.19 thing?

Before I just start testing, I wanted to see what y'all thought...

 

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[wade1mil]

You'll know the right price once the market responds. Set up 3 different landing pages with 3 different prices and see what the conversion rate is for each. Maybe I'm just weird, but I HATE when prices end in $7. I'd rather pay the extra $2.

 

[xmartel]

Marketing researchers have done studies on this and they say that 7 is the most desirable number to the subconscious mind, followed by 9.
To the average human subconscious mind, something priced at $47 will appear to be a better deal than the same thing priced at $46.
Goes to show how irrational the subconscious mind can be, but it's the people who know how to work that subconscious mind that can make the big bucks.
I tried to find a study that also stated which was the least desirable number, but all I could find was a vague reference to one saying that 8 was.

 

[fellipe]

I've read something like this a couple of days ago:

if something is priced 19.99 people puts it on the 10 to 20 range.
If the price is 20.00 people puts it on the 20 to 30 range.

 

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[Sean Marshall]

That's really interesting! And it makes sense even just thinking about how I myself buy stuff.

 

[RazvanRogoz]

There are three psychological barriers.

At $50.

At $100.

At $500.

It doesn't really matter if it's $47.99 or $49.97.

It matters that you don't go over the psychological barrier.

If you are selling a $100 product, offer it in two payments of $49.97.

If you are selling a $500 product, offer it in five equal payments of $97.97 or 10 payments of $49.97.

My advice to you, instead of wasting time on this, try to build value perception. If your value is worth $500, then it doesn't matter if you ask $45, 48 or $51.