RM97, RM197, RM1997.
$47.90, $29.97, $4997
Here are some examples, I’ve taken (from browsing the internet just 5 mins ago):
Why is everyone in love with the number 7 in pricing? Does it make people buy more? What’s the science behind it?
The truth about the number 7 in pricing.
It’s said that humans have a limiting capacity of processing no more than 7 items at one time.
Try these quick questions:
- Think and name 7 car manufacturer brands.
- Name 7 colors. (Did you start using your fingers to count?)
- Name me 7 websites you usually visit.
In fact, 7 is a magical number, as cited by George Miller.
- 7 days of the week.
- The 7 notes of the diatonic music scale.
- The 7 wonders of the world.
- The 7 deadly sins.
If you’re a content creator reading this, you might even feel seduced to produce your next online article titled ‘7 Sure-Tips to Lose Weight Fast in 7 Days’.
But the reason why marketers use the number 7 is probably because of a herd mentality. Wait, if that successful company is using 7s in their pricing, means it should work! Let’s use it.
Putting psychology into your pricing.
So here’s the actual science behind it.
The odd-even pricing psychology is when you use pricing that ends with an odd number (1,5,7,9) under a round number.
The reason this works to the advantage of marketers is because customers only focus on the first number and associate the pricing to be closer to it.
When we see RM1.99, we associate the price to RM1 instead of RM2, even if it’s just one cent away. See image below.
You can watch the entire video presentation on pricing and priming on LEAD’s Facebook. Click here to watch the presentation on Facebook.
And here’s another example:
Look at the pricing.
Sure feels like a RM4000 purchase more than an RM5000 purchase, isn’t it? Although, it’s just actually RM100 away from being a RM5000 product.
Change your pricing?
Should you go and change the price of your products and services now?
That depends. It’ll be strange (and maybe corny) if a physical cafe tried selling lattes priced at RM11.97. But then again, the same cafe could find success pricing their Eggs Benedict meal at RM16.90.
There must be a good reason behind every price update or change. Why is it priced that way? Why create the inconvenience for customers having to fork out spare coins to complete their purchase?
Because just like marketing, pricing is a game of perception. It’s never about the product.
I explain the odd-even and anchor pricing strategy in a live video on Facebook a few days ago. You can watch the 20-minutes presentation, by clicking here or the image below.