Q: This may seem funny but I have always wanted to know why *everyone* prices their products ending in a “7.” You know, $47, $97, $1997. Is there an unwritten code amongst Internet marketers or they just superstitious?
A: Hi Diane! It may seem like superstition, but there’s actually legit thinking behind this pricing strategy in the psychology or perception of pricing. As you may be aware, many business starting pricing items at $19.95 or $19.99, for example, because that price was “perceived” to be lower than $20 and more units were purchased at the $19.95 price than when the price was set to an even $20.
The strategy is the same for online pricing, except that the pricing seems to work better online when ending in a 7. I believe there was a study done several years ago that perpetuated this strategy (may have been an informal study), but I can no longer remember who did it or where to find it.
As in any marketing strategy, testing is the key. Try a few prices ending with 5 or 9 and compare sales when you change to a price ending in 7. You’ll want to keep the price that delivers the best sales for you.
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