Yes, it can. You must have seen stores that have most of their products priced at a number that ends with a 9.Called Charm prices or odd prices, they are used by millions of retailers and online stores.
But, why is that?
The brain! Yup, it’s responsible for many things including why charm prices work. Look at these two prices.
If your eyes instantly hooked on to the cabin priced at $2.99 then boom! you just experienced the “left-digit-effect”. The difference is not a lot,but your brain thinks otherwise. $2.99 is registered as a “sale” amount or rather a low-price amount even though it really isn’t. The brain relates $2.99 closer to 2 rather than 3, even if one may say otherwise. This works because most people read from left to right. The number 2 tells us or rather our mind that it’s the lower number that we can see. This pricing only works when the left most digit is lowered, giving it it’s name. E.g. $2.70 v $2.69 This won’t work here since the left most digit is the same.
In a 2005 study, customers were given $73 to spend and were asked how many products could they buy. They noted with products priced at .00 ending, customers estimated that they would be able buy less products as compared to .99 price endings, where customers estimated they could buy MORE products.
But number 9 doesn’t just work in .99 setting. An experiment was done by MIT and University of Chicago, where a women’s clothing item was priced at $34, $39 and $44. Can you guess which one sold the most?
Yes, the $39! Even when a lower priced option was available at $34, people still chose the $39 one.
“But why 9? Why not 5 or 7? They are odd numbers too!”
Retailers do use 5 and 7 in pricing but the number 9 has been a tradition with marketers and stores. According to some it came in to practice in the 19th century.
In Scot Morris’s Book of Strange Facts & Useless Information, he states – “In 1876, Melville E. Stone decided that what Chicago needed was a penny newspaper to compete with the nickel papers then on the stands. But there was a problem: with no sales tax, and with most goods priced for convenience at even-dollar figures, there weren’t many pennies in general circulation. Stone understood the consumer mind, however, and convinced several Chicago merchants to drop their prices — slightly. Impulse buyers, he explained, would more readily purchase a $3.00 item if it cost “only” $2.99. Shopkeepers who tried the plan found that it worked, but soon they faced their own penny shortage. Undaunted, Stone journeyed to Philadelphia, bought several barrels of pennies from the mint, and brought them back to the Windy City. Soon Chicagoans had pennies to spare and exchanged them for Stone’s new paper.”
Even today when you walk in to a store you see most products priced at an amount ending with a 9. This has conditioned our minds to the point where we look at a price ending with a 9 and equate it to a lower price option.
This was just one of the many pricing strategies used by online stores, but there are tons of other amazing and psychology based pricing strategies. Let’s look at 3 of those today.
1) No Comma , !
If you sell high priced products or services, then DON’T use the comma. Prices with more syllables are registered as expensive. e.g.
$1,299 = one thousand two hundred and ninety-nine – totals – 10 syllables
$1299 = twelve ninety-nine – totals 4 syllables
This may sound silly but it works. In a study done by Keith Coulter, Pilsik Choi and Kent Moore, they wanted to see how people perceived prices when written in a different way or spoken in a different way. They asked participants to rate the prices from 1-10 as per their magnitude. They were given prices with comma and some without. Participants rated the prices with commas as HIGH while prices without commas were rated as LOW. A price without comma registers as reasonable price with your customers.
So, write your high prices without the comma.
2) Price Anchoring
Look at these two products.
If you thought that the $599 was a great deal when compared to the $1299 then say hello to price anchoring.
“Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments” (source:Wikipedia)
When you present your customers with a low-priced option along with a high price option, the low-price product becomes a good deal. So, if you want to up the sales for a product priced at $$$ then show it alongside the $$$$ product.
3) The Artful Decoy
Look at the prices here and pick one.
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125 – Stock Photo subscription
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It’s only logical to pick the third option. Option number 2 is a decoy here. What number two is actually saying or rather doing is “You can look at me but the third option is way better and you know it!”
“But it makes no sense Sonia, people can see right through it!” Even so! it works. Here, let’s see how your perception changes when I offer you this
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Any change at all? If you were to offer your customers pricing options without the decoy price they will immediately think of option number 2 as “very expensive” and end up buying the low-price product.
You can use these four strategies to increase online sales.Which one was your favorite? Have you ever used such strategies before?
Write to me and let me know.
Psst! I am sharing 4 steps to more online sales
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