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Pricing: Whats the deal with magic number 7?

by Flareman
11 replies
Hi Warriors,

I've read on some posts that we should always price our products at $27, $67, $97 and any other price with a 7 at the end. This is also evident even on the warrior forum at the WSOs.

Whats the deal with that? Has there really been a study conducted that a price with a 7 at the end sells better or makes consumers more willing to take out their credit card?

Has anyone done any split test on this? Pricing is one of the important 4 Ps in Marketing. So I'm interested to hear what the rest of you have to say.
#deal #magic #number #pricing
  • Profile picture of the author Matt Morgan
    I split tested it and it increased did increase purchases.

    Im sure some other testers have tested it too.

    I am glad I got into split testing different things, as tweaking every element of the marketing funnel has really caused a dramatic increase in my profits.

    Small changes can cause big profits. So make sure you all Test

    I even tested using a photo at the start of a sales page, compared to not using one. The tested results were shocking.

    As far as why it works? its a physiological thing. Just like $19.99 seems a bit cheaper than $20, even though it is just $0.01 cheaper. That is why supermarkets have things in $x.99
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    • Profile picture of the author AndrewCavanagh
      I split test 7 against 9.99 and there was no difference (in other words I now make an extra $2.99 per product because I did some split testing on it).

      The idea of ending prices with 7 came from some split testing done MANY years ago by Ted Nicholas in direct mail.

      As with many things you should split test yourself to see what works in your market in real live testing.

      Kindest regards,
      Andrew Cavanagh
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    • Profile picture of the author jamesisgo
      My girlfriend was doing a course with a media expert and she mentioned that it has been tested that 7 converts better online and 5 converts better offline.

      Its all psychological but you can imagine 9.95 offline for a 100 page book and 17 online for a 30 page ebook.

      God Bless the internet
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  • Profile picture of the author Ashley Wright
    It is all psychological, just like when you go to the supermarket etc, most price usuall are for example £9.99 rather than £10!
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  • Profile picture of the author Bicycle Cat
    I once watched a TV show that explained why offline prices always seemed to end with a 9 (as in 29.99). People always sees the first digit. Instead of a 3, it's a 2. It makes the product seem cheaper that what it really is, making the buyer purchase it!
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  • Profile picture of the author BigMack
    the logic is if people see a 7, they round it down to the lowest tens or fives... so if its 27, theyll think its close to 25 or 20... some people have different borderlines when making a purchase... they wont pay 30, but theyll pay 25, since 27 is in the middle... they might round it down and make the purchase...

    well thats the idea though, hahaha... havent tested it yet for results...lol...
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  • Profile picture of the author Flareman
    All very interesting views... give me some ideas to price my next product... maybe $77.77! lol
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  • Profile picture of the author Karan Goel
    Psychological pricing - Wikipedia, the free encyclopedia

    PERIOD.
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  • Profile picture of the author Gene Pimentel
    It all depends on your market and what triggers their psyche. If they are more inclined to buy things offline, $39.99 or $39.95 may trigger a subconscious buying response better than $37.00.
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  • Profile picture of the author Steve Peters Benn
    ASDA, in the UK had sold product ending in .97 for a long time. They did this quite intentionally, and as part of Walmart were quite adept at price testing.

    The difference Andrew and others have found (or rather lack of it) is more than likely due to the fact that .97 endings are more suited to commodity products, versus services and luxury based goods.

    I suspect you are better anchoring the price to the type of product rather than expecting an indiscriminate benefit.
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