Forum Moderators: buckworks
I remember reading an old marketing book and they mentioned that the price "$100" sounds good to the ear, but "$99" looks good to the eye.
Can anybody tell me if using price points like $99 or $19.95 actually have an impact on sales? It seems that it must given almost all printed advertisements use this sort of structure but has anybody applied it to the web?
Thanks!
Go to Walmart and see all their .97 or whatever it is they use, it is psychological, and it was no different when I sold real estate, a house for $199,000 gets more action than one for $200,000.
my .199 cents
;)
If you notice how Wal*Mart prices, they are quite fond of using this kind of pricing strategy, even blaring it on TV with their "price cutter" spots. When I was at Home Shopping Network, we proved you could sell more of the same item at "not-round" or ".99" prices - for any particular item, we would sell much faster at say $22.13 than $21.99 or $22. Higher price sold faster at un-even prices.
Why? This kind of pricing approach looks to the customer like you are "really working on it", which is the message of the Wal*Mart spots. We found the same thing in focus groups for HSN, and the same appears to be true online.
Jim
That's fascinating, thanks for those insights
Very interesting to hear that last bit about actually placing the price higher but with uneven prices - I will experiment with that.
So for an item you are looking to sell for around $20.
So 19.99 would be the best.
2) 19.95
3) 19.98
Don't ask me why this is, I just know we have tested it and this is the case. The .99 sells better and you should NEVER use .00 unless you are selling to really high end customers where money is not an object, then you just drop the .00 completely and just show whole dollars.
On the really odd pricing, I've never seen an actual test or study so your info is intriguing. I have to ask, was the previous price of $X.13 or whatever shown next to a was price of $X.99? I may run a test on this pricing for my next sale campaign. It is interesting...
i worked in the produce department and had to set out bananas, when we were low on stock my boss would have me price them at .33 cents a pound and we got normal sales. when we were overstocked, we priced them at 3 pounds for $1 and we couldnt keep them on the shelves.
perception of pricing says a lot, in my experience a person seeing 19.99 or 19.27 still sees and translates that amount to be nineteen dollars. think about your trips to the store and pointing a product out to someone accompanying you... if they ask how much typically the response is, "nineteen dollars"
"... unless you are selling to really high end customers where money is not an object, then you just drop the .00 completely and just show whole dollars."
If you give the high end or luxury market what looks like a discounted or commodity level price, you may actually hurt sales.
One of my favrite stories about price points and sales volume involves a tourist souvenir shop where business had been slow. The owner was leaving for a holiday and told her assistant to mark every thing down by half.
When she returned a week later, the stock was almost completely sold through. But her assistant had misunderstood the instructions and had DOUBLED all the prices.
The souvenir market can be one of those where "price is no object", and the low prices were actually chasing sales away.
had DOUBLED all the prices
Yeah, you can't be too cheap either if quality -- or perceived quality -- is a factor. Many years ago when a partner and I opened a photo studio we wanted to churn some business real fast so we started out with a ridiculously low-priced introductory offer ($2.95 or so for the first 8x10).
Some sales, okay, but not enough to get by.
Bumped our next offer all the way to $29.95. Hit ten times the volume within a week -- and we were able to eat!
Jim
We have done a lot of work to increase the value in our product but I can't help think that we may actually lose some sales because they are soo low.
Any ideas where there is quality research on this area?
