Is $27 The New Magic Number

[Mangozoom]

I have had several must see offers from all the usual big boys of IM in the last few days ... typical JV stuff.

Anyway you read an impressive message on a sales page that is several feet long only to discover the wonder product is $27 ... a no brainer.

On closer examination or after paying the buy button it is apparent that $27 is the 30 trial price and you are joining a membership site with a monthly fee.

Would not say I fell for it but it is a compelling price point

Any thoughts or similar recent experiences?

John

[Charann Miller]

$27 does seem to be a comfortable middle ground in terms of price points, just look around the WSO forum to see what I mean. You will find prices ranging from $17 to $47 and $27 seems to be the average.

Research shows that infomercial companies price most of their cosmetics products at $39 or less, this is so that it won't raise alarm bells with the husbands when they go through the monthly visa bills, interesting isn't it?, anything $40 and over seems to raise red flags so that ties in perfectly with the $27 price point, it's not too much of a financial stretch for most folks.

[devius]

people seem like prices that end with a 7.
don't know why though.

[LogoNerds]

Some friends have also told me they saw better conversions at the following price points..

Instead of...

$19.99 try $17
$29.99 try $27
$49.99 try $47
$99.99 try $97
$299.99 try $297

A couple of years ago I was selling a software product for $149.95 I actually increased the price to $197 and didn't notice a decrease in sales. I actually made more money. I can't stress it enough, don't be scared to test different pricing points.

[yaz8888]

I just purchased a product from Percy Belcher for that same price $27

[Mangozoom]

Interesting feedback

Thanks Everyone

[Adam Jetson]

$19.99 try $17
$29.99 try $27
$49.99 try $47
$99.99 try $97
$299.99 try $297

Most marketers (in IM especially) should actually try out the reverse
(e.g 19.95 instead of 17).

Calculate the difference in profit of that extra 2.95 across several hundred
(or thousand) sales, and 7 doesn't seem quite so magical anymore

Besides, for many purchases the price is NOT the reason holding the
customer back from making a purchase. That's one reason why raising it
can have relatively little effect on the number of sales.

Best,
Adam

[Matt Maiden]

The psychology behind price numbers has been working for years.

In the offline world of direct marketing ( Mail Order ) the 9 is king. 9.95, 19.95, 29.95.

Online we found that 7 has done better than 9.

I even know one marketer that has a package that he sells online for $17 but the same product when advertised offline in magazines is still at the $19.95.

It's just like having the color red on your order form. "Only $19.95". Now for the Internet "Only $17". This is why the big red arrow works for opt-in forms.

Frank still uses one on his opt-in.

[MemberWing]

I do well with $195 online.
To me personally "7" at the and of an online price means "internet marketer is behind it - watch for scam".
But I am recovering...

Gleb

[Adam Jetson]

Online we found that 7 has done better than 9.

That would also depend on the market too right? not just because it's
online?

I'll bet ($17 ) that - relatively speaking - barely anyone in the IM niche
has done extensive price testing to bear out - for example - $17 over,
say, 19.95.

Or - in relation to the 'mystic' 7 - whether $17 is more effective than
$17.70, or $17.77, or $19.77 etc.

The actual psychology involved in IM is more likely related to the herd
mentality, where the "7"-based prices are seen so often and believed to
be the best price point, leading to their continual under-tested use.

The ideal though is...run your own tests over time for your own situation
and customer base.

Best,
Adam

[Matt Maiden]

Originally Posted by Adam Jetson

barely anyone in the IM niche
has done extensive price testing to bear out - for example - $17 over,
say, 19.95.

Wrong. There has been extensive testing on this.

"7"-based prices are seen so often and believed to be the best price point, leading to their continual under-tested use.

Without going into an economics class on marketing, a "price point" is the highest point at which you can sell a product before it is rejected by the consumer. "Whatever the market will bear".

The price point would also have to reflect true value in the mind of the consumer to help "sell" it.

Would you think that Mass Control 2 would be as valuable at $7. No.
That would not be a good price point for that product.

Would he sell more? I don't know. Maybe. But would he make any money?

So our price point is the best price we can come up with between what we would like to make from the product, what the market will bear, and what reflects the value of the product.

For this discussion let's say that the "price point" of a product is $22 this is what the "market will bear" on this product.

Offline I would put it at $19.95 because of the psychology behind the use of the number 9.

If I were selling it online I would put it at $17.

[Adam Jetson]

Without going into an economics class on marketing

Nice condescension. Bravo!

Offline I would put it at $19.95 because of the psychology behind the use of the number 9.

If I were selling it online I would put it at $17.

So, after all you just stated about "price point" (which doesn't completely add up
anyway - certainly not in context to the part of my post you quoted
against) you're effectively saying that online $17 is the price your
market will bare.

If that's truly the case Michael, I suggest you look to your offer (online)
and make it more compelling...the price point difference in that situation
should not be the determining factor in the decision to buy, or not to buy.

Wrong. There has been extensive testing on this.

Look forward to all the references, Michael...

...and possibly some more out of context quoting.

[Pat Ordenes]

Nice one Matthew.
very well put...
at the end of the day, the price alone wont sell the product, but the figures show that these price points DO help.

[Matt Maiden]

Originally Posted by Adam Jetson

Nice condescension. Bravo!

Sorry if I offended you.

That was not my intention. I was talking more about my reply and hoping it would not sound like a lecture.

Once again sorry.

Matt

[ShaunAllen]

$24.95 has actually been working better
for me than $27.00. I even did well with
a $25.00 price point.

However, $24.95 has proven that it's better
for me than $25.00.

Sometimes I will start a product as low
as $10 and continually raise it until I see
a major drop off in sales. It works for me!

[Matt Maiden]

I thought this was interesting. Found this on Google.

Research supporting odd pricing theory.

Kenneth Wisniewski and Robert Blattberg at the University of Chicago's Center for Research in Marketing showed that psychological pricing is one cause of price points.

A form of psychological pricing suggests buyers are more sensitive to certain ending digits.

When the price of margarine was lowered from 89 cents to 71 cents, sales volume increased a mere 65%, but when it was lowered from 89 to 69 cents, sales volume increased by 222%.

In another study, the perceived value of all the numbers between 1 and 100 were studied, and 77 was shown to have the lowest perceived value relative to its actual value.

Schindler & Kibarian (1996) tested odd pricing using three versions of a direct mail catalog for women's clothing.

The catalogs were identical except for the prices, which ended with 00, 99, or 88.

The version with prices ending in 99 generated 8% more sales volume and had more purchasers than the 00-ending version.

The 88-ending catalog produced a similar sales volume and number of purchasers to the 00-ending version.

[Brad Gosse]

My course is priced at $391 and it converts better than it did at $197

[Matt Maiden]

Originally Posted by Brad Gosse

My course is priced at $391 and it converts better than it did at $197

Brad,

How many points did you test before $391?
Did you try anything ending in a 9?

Matt

[AgentG]

Originally Posted by MemberWing

I do well with $195 online.
To me personally "7" at the and of an online price means "internet marketer is behind it - watch for scam".
But I am recovering...

Gleb

I experienced the same thing. Back then I didn't know that 7 is supposedly better than 9, but I always had a feeling of mistrust becauser every product cost 27 or 37.

[Matt Maiden]

AgentG,

How many different variations did you try and did you do any testing with them?

Thanks

Matt

[LogoNerds]

Bottom line is, test different pricing points. Test, test, test and test again. What-ever works for you, is what you should price your product/service at.

[Habitat]

Learned a lot from this post

[jasonl70]

My very first product I was selling at $17.95. I increased the price to 27.95 and my conversions did not drop at all. I was going to up it another 10, but never actually actually did.