# Pricing Psychology

1. I recently went to a subscription model and am having an interesting time experimenting with the price to see 1) How high I can put it before reaching a resistance level and 2) What is the best type of price format.

The second point relates to whether the price ends in zero cents (\$10.00) or \$10.50c or \$10.95c. When ever I have tried lower figures ending with 50c orders drop, when I try 00c the orders increase. So a question to US members, what is the ideal or expected cent ending?

Also does "Normal price \$15.00 but seasonal reduction \$12.00" sway US purchasers??

Any thoughts appreciated.

Gary

2. Run the same offer at the one price for a period of time and then at the second price.

The one that makes the most profit is the one you use.

3. Gary,

The extra \$0.50 is a major deterrent, I've seen it!

My rationale is this ... If your offering costs lets say 10.00 then you'll add on the clearing costs (paypal/merchant fees) and you'll round it up to \$11.50. The consumers perceive it this way also, so they assume your a small time operation. Stay with a \$XX.00 price if it is under \$20.00, but over \$20 go with \$XX.99.

I would price it at \$15.00 and then have a \$3 coupon if they refer a friend [img]/infopop/emoticons/icon_wink.gif[/img]

I know a software company that gets more sales because they raised their price from \$24.99 to \$35.99 ... price = perceived value.

Haiko

4. Get smart on pricing all you merchants. Walmart knows the facts on billions of dollars worth of cash register ringups. NEVER price something at 29.99 or 29.95 since all consumers assume this is retail pricing. If an item sells for 49.95 you sell more if priced at 51.40 or 48.68. Markdown on 49.95 should be priced at an odd amount like 36.84 because the consumer then assumes he's buying at your actual cost.

That will be 2487.40 for my fee on etailing 101 pricing advice...no PayPal please!!

[ 06-07-2002: Message edited by: EcomCity.com ]