Raise your prices AND increase your sales
Until now finding the right product price has been hit or miss
Is a .95 or a .99 cent price ending better?
Does it depend on the dollar amount?
Or is using an even dollar amount a preferable strategy?
Will $399 outsell $400; is $99 better than $100?
Are there really "magic" numbers that outperform others?
And are there "poison" numbers that should be avoided?
Just what pricing strategies should be used?
Certainly, pricing experience has shown that a few cents change in product price can make a difference of 10 or 20 percent in product sales and profit. Some price points are simply more appealing to customers than others.
But once you've set your product selling price, how do you fine-tune it to a HIGHER AND MORE APPEALING PRICE POINT?
Marketing and psychology researchers have sought pricing strategies
The need to understand the psychology of price appeal has led to many scientific studies in marketing and pricing psychology. And although interesting and sometimes useful pricing strategies have emerged, this research has always been constrained by a number of factors:
- sample sizes are consistently small
- actual appeal of (comfort level with) a price number is difficult to establish
- pricing strategy rules only hold for limited pricing ranges, if at all
Differences in appeal for different price points has been established, but quantification of price point appeal has remained elusive.
Now a psychological insight provides the right pricing strategy
In psychology, the Mere Exposure Effect refers to the phenomenon that the more we are exposed to something, the more we will like that something. Advertisers call it the "familiarity breeds liking" effect. The more often we see a person or thing, the more we like that person or thing. In psychology experiments, subjects shown unfamiliar Chinese characters developed a liking for a character proportionate to the number of times that character was viewed.
It follows that the most often-used prices WILL BE THE PRICES TO USE.
The most often-used prices will have the greatest appeal!
A web-wise pricing strategy to find "the most used prices"
The internet provides us all with an immense database, and that database includes all of the numbers we use to document prices, and to sell products. From the internet we can find the relative popularity of any price number, simply by searching for that price, and viewing the number of search results.If we search on $4.95 and $4.99, we will know, by the number of search results, which is the more popular price number, and therefore which has the higher appeal.
In point of act, $4.99 is about 55% more popular and appealing than $4.95! Pricing psychology therefore indicates that by raising a product price by only 4 cents, from $4.95 to $4.99 , sales will increase much more - because the customer feels right about the price; the price feels more natural and appropriate. And every price range has its sweet prices and prices to avoid!
And what about $5 and $5.00. Please keep reading!
So why not just search the web for the best prices to use?
Searching for price numbers does present some difficulties:
- different search engines interpret price numbers differently
- the number of search results ("1-10 of xxx results") is always approximate, and repeating the same search can give wildly different result totals over time
- too many similar search queries and the search engine may consider you a threat, and block further searches
- this strategy is extremely time-consuming
Pricing-Psychology.com has the best pricing strategy....XPricer.
XPricer - computer software that delivers pricing solutions
XPricer software incorporates a database of over 300,000 price points, each quantified as to its relative popularity (frequency of use), and by extension, its price point appeal (consumer comfort with or liking for that price number). Stringent data collection methodologies have been used to assure the most reliable pricing database available. To use XPricer, you simply adjust the upper and lower price limits using slider controls, to select your price range of interest.
Instantly you'll see the 10, 20 or 30 most popular and appealing prices within that pricing range.
XPricer software screenshot...with actual pricing data
In this example you'll notice that in the range $4.10 to $5.00, $5 is the most used price point, followed by $5.00, $4.99 and $4.95. But each base dollar amount has different price point relationships! There is no general rule that can be applied to pricing psychology and pricing strategy.
XPricer details
There are over 300,000 price points displayed in XPricer, covering the following price ranges and formats:
XPricer display options include the following:
- display top 10, 20 or 30 prices in selected range
- toggle on/off even dollar, tenths of dollar and hundreds of dollar display
- exclude or include prices ending in numbers provided (eg 99, 83)
- show sentinel price marker for comparison
XPricer is compatible with Windows XP and Vista.
