Pricing is a powerful marketing strategy in increasing purchases if priced right. You can take it up to the next level and increase the success rate by adding an additional 99-cent to the pricing. Have you ever wondered why so many businesses use that dreaded 99-cent in their pricing strategy? Consumers perceive 99-cent as cheap; $14.99 looks much cheaper than $15 even if it’s off by 1 cent.
The psychological effect of adding 99-cent to the dollar value works wonder for prices like $99.99, $89.99, $79.99, $69.99 and etc. The consumers analyze and conclude that the product hasn’t reached the next bracket [100, 90, 80, 70,] and think it is a steal. Manipulating the price to make it look like a bargain is a powerful psychological strategy used in marketing for the best ROI.
The 99-cent pricing strategy is dying out as consumers are becoming more immune to it from overuse. As consumers get smarter and more immune to the psychological effect of 99-cent, it is best to do psychological research and find the next best number.
Will 49-cents be the next great number? Is a hypothetical guess, but I believe it will do well since it is less than 2 quarters which can have a very powerful psychological effect for consumers. Finding the next perfect psychological number takes research and experimentation.
8 Comments
This has always been an extremely interesting phenomenon in my eyes because even when you know that’s what the strategy is, you still can’t always help falling into that psychological trap!
But what if we get rid of the penny, as some have been advocating? Will the magic number become $.95?
I’m not sure what it is about this that makes it so attractive, but people have been doing this for a long time. I’ve seen a trend towards the 97 number instead of .99 and it seems to be picking up steam with consumers.
Kate- Indeed Kate! Is a very scary psychological trap that can get people into buy mode. I’m not sure which number will surpass 99. Some big companies need to do a research on it and give us a report!
Bruce- Interesting, if the trend dictates 97 then it might become the new magic number instead of 99 soon.
Here is another food for thought - the magic number 7 …. it is well known that using 7 in price of digital product greatly increases conversion … am still unable to figure it out but its funny how psychology works …
yes the dreaded 99cents ending trap
Alex- It sounds really interesting! 7 is one lucky number =).
Kirk- looks like you been spending a lot =).
It is a trick that has worked for decades, I don’t see it changing in the near future. Even the 99c store is more popular than the dollar store, dollar tree and the dollar general.
Debo- It might or might not. That one cent makes a big difference psychologically!
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Have you ever wondered why so many businesses use that dreaded 99-cent in their pricing strategy? Consumers perceive 99-cent as cheap; $14.99 looks much cheaper than $15 even if it’s off by 1 cent.
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