When you go shopping do you ever really take notice of the prices?
Next time have a quick scan of the receipt. How many of the prices of the things that you bought end in 9? Chances are the vast majority.
Why? Because 9 is a hugely powerful number when it comes to pricing and price psychology. There have been numerous studies into its power but one of my favourites involves three experiments carried out by Anderson and Simester in their research paper “The Effects of $9 Price Endings on Retail Sales”.
One of those experiments saw them testing an item in a catalogue at three different price points to see how the price affected conversions.
The results will surprise you.
At $34 they sold 16 units
At $39 they sold 21 units
At $44 they told 17 units
The cheapest did not sell the most. The most expensive did not sell the least. In fact, the price point that converted best was the mid-price point of $39. It outsold the $34 price point despite being more expensive.
In fact, it converted 24% higher despite the higher price.
So imagine if you put your prices up from say 34 to 39 and you increase your sales by 24% as a result. Your total turnover goes up much more and because your costs hardly change the impact on bottom line profits could be double.
Of course, it could be tempting to end all your prices in a 9.
But don’t. It could begin to look overused. It could look technique-y.
Instead, understand the power of a range of price endings – and their implications.
Find out more about how to use the power of 9 in this video.
You can watch the video here.
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Wishing you every success on your pricing journey
Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller “Effective Pricing for Accountants”
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