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Newbie Question

by watdrew
8 replies
OK, so here is my first post. I've been reading the forums for a few weeks now and there is one thing that keeps sticking out for me. Why are most products sold for something like $17, $27, or $37? Why aren't they sold at more round number prices like $20, $30, $40? Obviously, they are a little cheaper but does that really change conversion? I don't know, I guess I just don't like seeing numbers that aren't nice and round.
#newbie #question
  • Profile picture of the author GSX Enterprises
    Hey drew, welcome to the forums!

    Regarding your question and pricing, I think it's a psychological thing regarding the pay structure and making prices seem lower by taking off that $3, which may in turn helping conversions! I've always wondered the same thing (I even priced my WSO the same way)

    Or it could just be a trend that stuck!

    Either way, welcome to the forums!

    -Safe Travels
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  • Profile picture of the author money2k
    It's all psychological. $29.99 sounds better than $30.
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    • Profile picture of the author watdrew
      Thanks for the responses. I figured it was most likely psychological. Just interesting to see everything ending in a 7.
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  • Profile picture of the author CDarklock
    Originally Posted by watdrew View Post

    Why are most products sold for something like $17, $27, or $37?
    Price psychology. People mentally round money to $5 increments, but they make decisions about prices in $10 increments. So it goes like this.

    1. $20 is mentally rounded to $20 and a decision is made like it is $20.

    2. $22 is mentally rounded to $20 and a decision is made like it is $20.

    3. $23 is mentally rounded to $25 and a decision is made like it is $20.

    4. $25 is mentally rounded to $25 and a decision is made like it is $20.

    5. $27 is mentally rounded to $25 and a decision is made like it is $20.

    6. $28 is mentally rounded to $30 and a decision is made like it is $30.

    So if your product is worth $20, you can price it at $27 and get another $7 for it without having to deliver any more value.

    This is also why the $7 script works so well. The price is mentally rounded to $5, and the decision is made as though it were free even though it isn't.
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    "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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    • Profile picture of the author yommys01
      Originally Posted by CDarklock View Post

      Price psychology. People mentally round money to $5 increments, but they make decisions about prices in $10 increments. So it goes like this.

      1. $20 is mentally rounded to $20 and a decision is made like it is $20.

      2. $22 is mentally rounded to $20 and a decision is made like it is $20.

      3. $23 is mentally rounded to $25 and a decision is made like it is $20.

      4. $25 is mentally rounded to $25 and a decision is made like it is $20.

      5. $27 is mentally rounded to $25 and a decision is made like it is $20.

      6. $28 is mentally rounded to $30 and a decision is made like it is $30.

      So if your product is worth $20, you can price it at $27 and get another $7 for it without having to deliver any more value.

      This is also why the $7 script works so well. The price is mentally rounded to $5, and the decision is made as though it were free even though it isn't.
      Well said, don't think I can ever beat that.
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  • Profile picture of the author arti-pancholi
    hi basically..for example a $297 product works better than the old $299. Yes there is definitely a psychological aspect to it, as $297 seems a lot less than $300, whereas $299 doesnt quite have the same effect. I do use this method myself, and know many other fellow marketers who use this technique...they use it because it works.
    As we all know..copy, rinse, repeat...what is proven to work is repeated to work again. Most products DO sell better when priced with a '7' at the end.
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  • Profile picture of the author Sacha Sargoni
    Its like at the gas pumps. The big sign says unleaded $2.72.9 per gallon, we read it as 2.72 and not the 2.73 that it is. I mean, i know this,but it still gets me every time lol.
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