The Pricing Power of 9: Does it Work?

Many companies offer their products or services at “odd” prices like $4.99 or €24.98. But does lowering your price by even just a little bit from a round number really make that much of a difference? Surprisingly, when it’s time to buy, people can be somewhat irrational and the answer seems to be yes.

The ‘9’ Factor

Enter pricing psychology tactic number one. The 9 Factor, otherwise known as charm pricing, is one of the most widely used and oldest pricing practices. Ending prices with .99 or .97, or a little less than a round number, is a market psychology tactic that profoundly affects buying decisions.

The Sale Price Advantage

A classic example of the power of 9 is an experiment conducted by MIT and the University of Chicago in which a standard women’s clothing item was tested at prices of $34, $39, and $44. To the researchers’ surprise, the item sold best at $39 — even though it was more expensive than one of the other options. Similarly to Poundstone’s findings, this study also found that the prices ending in 9 outperformed lower prices on average by more than 24%.

Left-Digit Effect

Savvy merchants also get help from the pricing perceptions of consumers themselves. The typical consumer reads numbers from left to right, which is called the left-digit effect. When buyers do this, they interpret a $7.99 price as $7 — especially if they are scanning quickly. This makes the price seem lower, and thus more affordable and appealing. Not surprisingly, when it’s perceived as such, a sale is much more likely to happen.

Apply and Try

When finding the perfect price for your product, it’s also important to consider how your customers view prices, especially ones that end in the number 9. Charm pricing can have a significant impact on your sales and even the most sophisticated brands use it.

Global Business Development | User Acquisition | Digital Advertising | Mobile Marketing | Strategic Partnerships💡 🚀 💵 #hosting #ecommerce #strategy

Global Business Development | User Acquisition | Digital Advertising | Mobile Marketing | Strategic Partnerships💡 🚀 💵 #hosting #ecommerce #strategy