I think its just from their experience as customers elsewhere.
For me — $10 for a simple service seems a little pricey, $9 is basically $10 still, $8 is still a a tiny bit high — but $7 is the sweet spot! Same goes for higher prices too — I like $37 rather than $40. I'd think less about paying $17 for a service than $20, $19 or even $15!
Not sure why, maybe its because the $7 on the end becomes my focus:- its still technically pocket change — but also in the higher end out of 10...and I think about it more than the $30?
(plus if your picking smart numbers for prices, check out the "common" exchange rate people think of without checking. For me, I think of a dollar being worth £0.50p, so $37 is around £18.50, when in fact its over £21; for some it may not make a difference, but for others, the extra few pounds to nudge it over £20 may be enough for them to pick a slightly cheaper plan. And I would imagine a similar thing happens with the euro and other popular currencies also.)
7 isn't a bad number - and it seems to have worked with getting the bailout passed. 700 Billion feels closer/is easy to report as "Half a billion". 800 Billion would have been rounded to "One Trillion" - a (slightly) scarier number. It's very much the same problem, though at a different scale & with different decision makers - in the case of the bailout, the target audience was Congress with a nod to the media. In any case - to bring this back around to the original post - the lesson here is to know (or be) your audience and to understand the sacrifices they'll make for the value you offer.
I've noticed some stores use the cent amount to indicate other things about the price like what kind of discount has been applied. So for example .97 might mean it's on sale, and .95 might mean it's on clearance.
Comments
I think its just from their experience as customers elsewhere.
For me — $10 for a simple service seems a little pricey, $9 is basically $10 still, $8 is still a a tiny bit high — but $7 is the sweet spot! Same goes for higher prices too — I like $37 rather than $40. I'd think less about paying $17 for a service than $20, $19 or even $15!
Not sure why, maybe its because the $7 on the end becomes my focus:- its still technically pocket change — but also in the higher end out of 10...and I think about it more than the $30?
(plus if your picking smart numbers for prices, check out the "common" exchange rate people think of without checking. For me, I think of a dollar being worth £0.50p, so $37 is around £18.50, when in fact its over £21; for some it may not make a difference, but for others, the extra few pounds to nudge it over £20 may be enough for them to pick a slightly cheaper plan. And I would imagine a similar thing happens with the euro and other popular currencies also.)
7 isn't a bad number - and it seems to have worked with getting the bailout passed. 700 Billion feels closer/is easy to report as "Half a billion". 800 Billion would have been rounded to "One Trillion" - a (slightly) scarier number. It's very much the same problem, though at a different scale & with different decision makers - in the case of the bailout, the target audience was Congress with a nod to the media. In any case - to bring this back around to the original post - the lesson here is to know (or be) your audience and to understand the sacrifices they'll make for the value you offer.
Numerous psychology studies have found that .97 is the new .99 - you're already used to rounding .99 up to $1 but not $.97
I've noticed some stores use the cent amount to indicate other things about the price like what kind of discount has been applied. So for example .97 might mean it's on sale, and .95 might mean it's on clearance.
Yes, numerous, with the case here being that the number is zero.