Interesting article on the PSYCHOLOGY of pricing

[$5 submissions]

Psychological "price anchors" might apply to online purchases as well. Here's an excerpt on 'price anchors':

Is $279 a lot of money to spend on an automatic bread maker? When Williams-Sonoma first marketed these then-novel gadgets more than 20 years ago, no shopper knew what a bread maker ought to cost, and Williams-Sonoma didn't sell a lot of them. Then it introduced a deluxe, $450 model. The company didn't sell many of these either, but sales of the $279 model went through the roof. The deluxe bread maker made the regular one seem like a bargain. Conclusion: We are affected by anchors whether it's rational or not, whether we want to be or not.

http://www.latimes.com/news/opinion/...ome-commentary

[After Shock Media]

P.S. wish I could find the science article I read about pricing and the number 7 in it. You would of gotten a kick out of it.

[MarkMan]

yaa , i did some numbering in marketing back in the day

[Fresh]

pretty interesting. I would love to read the #7 article youre talkin about ASM. You got me curious

[Lilli]

Originally Posted by After Shock Media

P.S. wish I could find the science article I read about pricing and the number 7 in it. You would of gotten a kick out of it.

you mean like 27.95$ would sell better than 26.95$ ?

[After Shock Media]

Originally Posted by Dave Guru

pretty interesting. I would love to read the #7 article youre talkin about ASM. You got me curious

I wish I could find it again. You know how you go clicking around some day and end up 200 hops from where you started and find something that catches your eye and you read it. Couple that with it being a scientific/academic report and well finding it again latter is near impossible.

Boiled down to more volume is done when a price ends with a .07 or .77
Showed that consumers have been trained to expect .95 or .99 and when they see .07 or .77 they associate it with a bargain or sale.
Also went into the association of 7 being considered a lucky number but no evidence suggested that went into the buying thought.

[After Shock Media]

Originally Posted by Lilli

you mean like 27.95$ would sell better than 26.95$ ?

No, 26.07 or 26.77 would sell better according to them, same with the 27.07 or 27.77 price.

[MarkMan]

actualy i remember learning that odd numbers are better then even numbers
since most people don't easly divide or multiply the number ..

actualy 27.95 is alot better then 26.95

but 27.57 is even better then that

[marketsmart]

that was interesting!

[basschick]

i've heard that 7 thing before but we always make better sales with a price that ends in .95.

[Fresh]

Originally Posted by After Shock Media

I wish I could find it again. You know how you go clicking around some day and end up 200 hops from where you started and find something that catches your eye and you read it. Couple that with it being a scientific/academic report and well finding it again latter is near impossible.

Boiled down to more volume is done when a price ends with a .07 or .77
Showed that consumers have been trained to expect .95 or .99 and when they see .07 or .77 they associate it with a bargain or sale.
Also went into the association of 7 being considered a lucky number but no evidence suggested that went into the buying thought.

Originally Posted by MarkMan

actualy i remember learning that odd numbers are better then even numbers
since most people don't easly divide or multiply the number ..

actualy 27.95 is alot better then 26.95

but 27.57 is even better then that

Both are very interesting and do make sense. Im going to look into this a lil more.

[DjSap]

Pretty interesting stuff, maybe I should add deluxe memberships to my site to boost the normal ones

[latinasojourn]

erotica is an emotional impulse sale and may differ from other more rational purchases.

in fact, for many a higher price for erotica connotes the concept of "hotter" or more exclusive and a lower price may actually sell less units.

[sickkittens]

Originally Posted by After Shock Media

P.S. wish I could find the science article I read about pricing and the number 7 in it. You would of gotten a kick out of it.

Yup. I heard about that too. Something about pricing ending in 7 sells alot better than other numbers...

$17, $27, etc.

[_xXx_]

interesting read

[Libertine]

Originally Posted by DjSap

Pretty interesting stuff, maybe I should add deluxe memberships to my site to boost the normal ones

Nah. Too much effort.

You should just add: "Limited time offer: now from [higher price] for only [current price]!". There, now you have surfers thinking they are getting a bargain.

[V_RocKs]

How many sponsors will update their prices?

[woj]

interesting stuff

[DaddyHalbucks]

They did a study with mustard. One they priced at like $1.99. And another one they priced at like $3.99. Same mustard. Packaging I forget.

The higher priced one out sold the cheaper one, because the higher price connoted quality.

Sometimes a higher price sells better than a lower price.

[jayeff]

Originally Posted by DaddyHalbucks

Sometimes a higher price sells better than a lower price.

It really isn't as simple as that.

In another thread today I mentioned how odd it was to come to the US and see regular grocery brands (in the UK and Europe) pitched and priced as premium brands here. But it isn't solely that they have a higher price: all the marketing associated with them combines to create the impression that the higher price is justified.

Googling "consumer price sensitivity" produces over 6 million results. To get an idea how complex a topic it is, just scan through some of the articles on the first page. The first thing which becomes clear is that price sensitivity varies according to the type of product or service concerned. Secondly, price sensitivity is frequently made greater (or dampened down) by other factors associated with the particular market.

In short if you grab one message relating to this field and apply it out of context, you are likely to come badly unstuck.

[minusonebit]

Originally Posted by Libertine

Nah. Too much effort.

You should just add: "Limited time offer: now from [higher price] for only [current price]!". There, now you have surfers thinking they are getting a bargain.

You are a class action lawsuit waiting to happen with thoughts like that.

[heywood]

Originally Posted by minusonebit

You are a class action lawsuit waiting to happen with thoughts like that.

Not exactly, its taught in marketing 101. This one is almost completely obvious to most people thinking about presenting their price points.

[$5 submissions]

Originally Posted by After Shock Media

P.S. wish I could find the science article I read about pricing and the number 7 in it. You would of gotten a kick out of it.

I definitely would love to read that. There's also a study out there that measures the NUMBER OF TIMES people have to see ad copy or an ad's call to action before they actually act on it.

[$5 submissions]

I'm glad I ran into this. I'm about to launch a new service package

[donkevlar]

I wonder how much books about the psychology of pricing cost...

[After Shock Media]

Well $5 submissions, I did spend a good two hours trying to find it today and no damn luck. So much crap in the engines now adays.

[BV]

like when you play golf it's better to yell 3.99 than 4

[After Shock Media]

Originally Posted by BV

like when you play golf it's better to yell 3.99 than 4

buhahaha.

Back to serious now since this is one of the rare moments on gfy where there is a business related non drama would you hit it thread.

Few other things I have either learned or studied a lot about concerning pricing.

If you want a true high end feel, there never should be any cents after the price. Use a solid hard round dollar figure. The cents denote bargain.

When pricing figure out what sort of consumption you desire. Naturally most consider porn an impulse purchase so this one could be argumentative. Typically consumers want to grab their value as soon as they can after buying the product. They desire to feel they have used up their value as quick as they can. So one should consider this factor when it comes to billing and presenting them with a price. Which oddly brings me to my next one.

Unbundle your prices. 29.70 a month is just that. Now .99 a day makes it seem even that much more affordable. Combined with the above reference as well as say longer join options like "three months for less than a dollar a day" makes it very more attractive.

I could go on... but I will wait.

[$5 submissions]

Originally Posted by After Shock Media

Unbundle your prices. 29.70 a month is just that. Now .99 a day makes it seem even that much more affordable. Combined with the above reference as well as say longer join options like "three months for less than a dollar a day" makes it very more attractive.

This is dead on. One of the projects I run QUADRUPLED its volume when we "unbundled" the pricing to per unit/per action as opposed to a "package" price.

[martinsc]

great stuff

[$5 submissions]

Originally Posted by martinsc

great stuff

For sure

[LiveDose]

Nice link. Will check it out, thanks.

[minusonebit]

Originally Posted by heywood

Not exactly, its taught in marketing 101. This one is almost completely obvious to most people thinking about presenting their price points.

You're skating too close to the line for my liking. There was once a furniture store in my hometown that was constantly having a going out of business sale, everything must go. It went on for years, radio ads, TV ads, people out holding signs, it sort of became the town joke, people would drive by and say "heh, still going out of business, eh?". Then one day, I drove by, and the place really was out of business. I searched around in the papers a little bit, turns out they were sued by the attorney general and the subject of three class action lawsuits for unfair and deceptive trade practices as a result of this little scheme they kept pulling over.

Its one thing to be creative, but it has to remain accurate and legitimate. I suppose the limited time pricing thing could work because you didnt say how long "limited" is, and you could end it at any time so I suppose that would prolly fly. Just be careful, is all I am saying.

[Alex]

Originally Posted by minusonebit

You're skating too close to the line for my liking. There was once a furniture store in my hometown that was constantly having a going out of business sale, everything must go. It went on for years, radio ads, TV ads, people out holding signs, it sort of became the town joke, people would drive by and say "heh, still going out of business, eh?". Then one day, I drove by, and the place really was out of business. I searched around in the papers a little bit, turns out they were sued by the attorney general and the subject of three class action lawsuits for unfair and deceptive trade practices as a result of this little scheme they kept pulling over.

Its one thing to be creative, but it has to remain accurate and legitimate. I suppose the limited time pricing thing could work because you didnt say how long "limited" is, and you could end it at any time so I suppose that would prolly fly. Just be careful, is all I am saying.

You dont happen to live in California do you? We might be living near the same furniture store

[borked]

Originally Posted by Dave Guru

pretty interesting. I would love to read the #7 article youre talkin about ASM. You got me curious

The article most probably stems from the classic George Miller's 1956 study, The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information

It basically has to do with the fact that (as he showed) the brain recodes from a base-two arithmetic to a base-four arithmetic. However, there have been plenty of urban legends grown from that study.

Have a look on Wikipedia

[biftek]

hhmmm well selling less for more seems to work for coca cola and other brands
not sure about elsehwhere in the world
but a can of coke 375ml used to sell for avg price of $1.50AUD , then then changed the can to the shape of redbull tall and slender and dropped 30mls out of the can so now its 345ml , and upped the price to $1.80 , using the excuse that market research showed that's what the consumer wanted

[godisdead]

Originally Posted by $5 submissions

Psychological "price anchors" might apply to online purchases as well. Here's an excerpt on 'price anchors':

Is $279 a lot of money to spend on an automatic bread maker? When Williams-Sonoma first marketed these then-novel gadgets more than 20 years ago, no shopper knew what a bread maker ought to cost, and Williams-Sonoma didn't sell a lot of them. Then it introduced a deluxe, $450 model. The company didn't sell many of these either, but sales of the $279 model went through the roof. The deluxe bread maker made the regular one seem like a bargain. Conclusion: We are affected by anchors whether it's rational or not, whether we want to be or not.

http://www.latimes.com/news/opinion/...ome-commentary

Brilliant article. I've been talking to a psychology student quite a while ago and she just did some work on that effect. If I meet her again, I'll have to ask her again. This anchor-stuff is pretty powerful stuff. It allows you to manipulate people without them realizing it.

[jonesy]

theres a company here in s fla named brands mart - huge warehouse type place, they buy in volume and pass along the sacings ect.

every price for every product ends in 88 or priced with an 8.

example - 28.88, 18.88, 38 .88

click the link to check out there add - its nuts
http://www.brandsmartusa.net/afl/p1.htm

[BV]

Originally Posted by jonesy

theres a company here in s fla named brands mart - huge warehouse type place, they buy in volume and pass along the sacings ect.

every price for every product ends in 88 or priced with an 8.

example - 28.88, 18.88, 38 .88

click the link to check out there add - its nuts
http://www.brandsmartusa.net/afl/p1.htm

Dam!, I can't believe how cheap DVD players have gotten and the features they now have. 18.88 for a DVD player. WOW.

A DVD movie costs more than a player now. lol

[revolte]

That is some cool article there! Thank you

[More Booze]

There are certain numbers that appeal to our subconscious mind. We
like things that come in twos (salt and pepper, eggs and ham), threes
(Three Blind Mice, three wishes, and three chances), and tens (of
course, we have ten fingers and ten toes, so this one is only natural!)

One of the most powerful numbers that triggers a subconscious response
is the number seven. (Think Snow White and the 7 Dwarfs, Lucky
number 7, and seven days in the week.) With this in mind, here are
seven ways to incorporate the "magic" of the number seven into your
marketing:

1. Pricing- Use a price ending in 7 for your product. Whether you stay
with whole numbers ($17, $27, $67) or not ($19.97, $24.97, or even
$37.77!), try adding some "seven magic" to your pricing structure and
note the difference.

2. Headlines- Test your headlines with and without a 7 in them. You
may be surprised at the results! The seven doesn't need to stand alone-
you can use it within whatever number you may have in your headline
(change 1800% to 1700%, or $562 to $567) and it will have the same
effect. If you don't have a number in your current headline, work one
in- with a 7 included, of course!

3. Follow-up- You've probably heard this before: Prospects need to
see your message several times before they act. In fact, it usually
takes (want to guess?) SEVEN exposures to your offer before they are
ready to buy! When you create follow-up messages, usually by an
autoresponder series, don't stop writing until you've reached number
seven- unless, of course, you don't want to make the sale!

4. Titles- Use "7" in your ebook, report, and article titles. For example,
"7 Deadly Mistakes You Can't Afford To Make In Your E-Business" or
"How You Can Create Info-Products In 7 Short Hours".

5. Deadlines- Compare "Place your order this week, and you'll get..."
with "Place your order in the next 7 days, and you'll get...". Same
time limit, but the number creates more urgency in the mind of your
reader. (Even though they probably translate the statement in their
mind as, "Gosh! I better order now- I only have a week!")

6. Bonuses- Pay attention to the sales letters you see this week. Of
those who offer more than three bonuses (the most common), you'll
notice that there tends to be seven! Why? Because it feels RIGHT.

7. Tips- When offering a list of tips on your site or in articles (such
as this one!), group them into "sevens." Even if you don't number
them, a list of seven items is more appealing visually than six or
eight.

Now, you may be thinking that this is a bunch of, well...hooey. But
there is a strong psychological connection to the number seven that
we humans feel. Mirroring this connection while marketing your
product makes your prospects feel comfortable, and the more
comfortable they are with you the more likely they are to buy- so
try using the "magic" of the number 7 where you can!

http://www.contentmart.com/ContentMa...D=31&content=1

[$5 submissions]

Originally Posted by godisdead

Brilliant article. I've been talking to a psychology student quite a while ago and she just did some work on that effect. If I meet her again, I'll have to ask her again. This anchor-stuff is pretty powerful stuff. It allows you to manipulate people without them realizing it.

Yep. There's a reason many mainstream 'sales pages' are arranged the way they are. Maybe there's some implications to adult designs and calls to action.

[teksonline]

When I was in wholesale, I use to try the price game $99.95 etc

It didnt work at all, When I made it $100 flat, the phone started to ring..

If that means anything to anyone <shrug>

[jayeff]

Originally Posted by More Booze

Now, you may be thinking that this is a bunch of, well...hooey. But there is a strong psychological connection to the number seven that we humans feel. Mirroring this connection while marketing your product makes your prospects feel comfortable

Your last sentence likely as not hit the nail on the head: it's as much about comfort as the numbers themselves.

The main reason you cannot simply take marketing "tricks" out of context and apply them universally is that we have a variety of expectations of different products and services. Those expectations change, not only between one sector and another, but even between competing products. For example, we expect different things from the presentation of a premium brand of coffee than we do from a cheap brand. IMO one of the reasons that cheap porn sites were less than a roaring success was that most were made to look like premium sites (and that was often the sales pitch too). That combination only served to convince people they would not get what was being promised.

Marketing is about understanding the triggers for the specific audience with which you are dealing. The biggest weakness of online porn in this area is that generally we go for a one-size-fits-all approach, at most changing colors and fonts for different categories. It's an appealing idea that a certain type of site can appeal to everyone interested in the content it offers, but it isn't realistic. The way we work, the presentation of our sites defines the audience to which we end up selling, rather than the design, price and sales pitch being defined by the audience we intend to target.

[tony286]

very interesting article

[Quagmire]

So should you change your name to $19 Deluxe submissions and then watch your $5 submissions stock go through the roof? :D

Seriously though, price points/anchors are a huge part of marketing whether it be online or offline. People still associate the cent rule to online purchases as well. $12.95 looks like more of a bargain than $13 to the average buyer even though its only 5 cents. and of course putting a deluxe model at a much higher price next to the product you want to sell makes it look all that much better.

One of the mainstream services I work with has a $14.95 option and the next step up is $19.95 and you get double the service/product. we will get a few cheap people testing out the $14.95 option, but the bulk of the buyers go for the $19.95 option.