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Lifehacker exposes the secrets of the "lucky 7" in pricing

by Alexandre Valois
7 replies
I was reading lifehacker this morning and gound this interesting article

Lifehacker, tips and downloads for getting things done

There's often talks here about pricing psychology and questions about the mysterious 7 we see on almost all infoproducts... but what is it about?

Share your thougths, comments and experience guys

Alex.
#exposes #lifehacker #lucky 7 #pricing #secrets
  • Profile picture of the author TPFLegionaire
    Lifehacker is a good site but for this article, a link to the source is more useful:

    Party Like It's 19.99: The Psychology of Pricing | Wise Bread
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    Save Kim Winfrey! Buy the WSO or donate.
    As an aside use the products in the WSO to make tons of cash!
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  • Profile picture of the author Matt Bard
    Alex,

    I just read the article and this statement stood out:

    "Unusual prices ending in 4s or 7s tend to be seen as precisely priced items. The signal is that the seller has scrutinized its costs and determined the optimal price, fair to both the seller and buyer".

    This is suggesting that the reason that 7's are used as much as they are is because they tend to be seen as precisely priced.

    My testing over the years would suggest otherwise and that there is another psychological factor attached to 7 that I haven't discovered yet.

    If the precisely priced items theory were true, then why would the .95 or the 7 still outperform any other precise ending?

    I have tried $15.11, $4.38, $3.83, $18.23...ending up with worse results than our favorites of $7, $19.95, $17, $27, $47, $67, $97.

    Thereby blowing out the precise pricing idea. (IMHO)

    After trying several variations over the years, I have come to the conclusion that the $7 through $97 above, are the magic numbers I will stick with.

    I don't understand how salmon find their way back to their birthplace, but I know that they do.
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    • Profile picture of the author Alexandre Valois
      Interesting observation Brett.

      My thought is that the "precision" effect of 7 pricing might lose it's influence with digital products since everyone knows subconsciously that there is no real quantitative production costs associated to it, while buying lumber or floor tiles at the store is a completely different experience and people instinctively know that many variables come into play to determine the prices.

      When you say that 7 and 97 have been the best converting for you, what other prices have you tested them against?
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      • Profile picture of the author Matt Bard
        Originally Posted by Alexandre Valois View Post

        Interesting observation Brett.
        I'm going to go out on a limb here and assume that you are directing your question to me, Matt. lol

        I have tested the whole 7 series ($7, $17, $27, $37...) and $19.95 (the old offline standard for many years) against several other combination's (see my previous post).

        Can also tell you that $27 does better than $17 and $47 does better than $37.

        Does that mean that there is something different about 2, 4, and 7 psychologically? Don't know. Just know what the results have been.

        I have found that $7, $9, and $9.95 are so close that if you were going to do the whole "$7 Secrets" model with $7 reports, you might as well make it $9.95 and make $2.95 more.

        I've tested this in different niches too so it's not just the IM crowd that responds to the 7.

        What I find interesting in all of this is why $9.95 or $19.95 do better offline than they do here on the Internet.

        Yes I realize that I just said that $7, $9 and $9.95 are close here online but the whole 7 thing just does not translate offline at all.

        Also, $27 does better than $19.95 here online so once again, the 7 has some Internet or computer screen connection or relationship that it doesn't have out in the "real" world.
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  • Profile picture of the author DireStraits
    I'm very sceptical about all of this, it has to be said.

    For a start, none of the examples given in the article work with me. I cannot remember when I've ever looked at an item priced at £12.99 and thought "ohhh, 12 pounds and something": I've always rounded it up, and the price in my mind is £13.00.

    I'm not a psychologist and I don't test these things for a living, but my instinctive reaction is to believe either:

    (1) Maybe I'm blessed to be in a minority of people who are immune to this sort of "trickery". (Unlikely? :confused

    (2) Maybe it worked for a short amount of time, at some point, until everyone quickly wisened up - by which point it just stuck and became standard "because the theory still sounded good".

    (Or maybe the people for whom it works are just such cheapskates that - in the case of the £xx.99 vs. £xx.00 example - a penny's difference really is a deal-sweetener. :rolleyes: lol)

    If you start from an assumption that something is, you can nearly always concoct some logical-sounding theory, and adduce selective fragments of "evidence" to back it up. And you can easily convince people this way. But without real extensive testing, it's still just a nice-sounding theory.

    Just my thoughts.
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    • Profile picture of the author Alexandre Valois
      Originally Posted by DireStraits View Post

      I'm very sceptical about all of this, it has to be said.

      For a start, none of the examples given in the article work with me. I cannot remember when I've ever looked at an item priced at £12.99 and thought "ohhh, 12 pounds and something": I've always rounded it up, and the price in my mind is £13.00.

      I'm not a psychologist and I don't test these things for a living, but my instinctive reaction is to believe either:

      (1) Maybe I'm blessed to be in a minority of people who are immune to this sort of "trickery". (Unlikely? :confused

      (2) Maybe it worked for a short amount of time, at some point, until everyone quickly wisened up - by which point it just stuck and became standard "because the theory still sounded good".

      (Or maybe the people for whom it works are just such cheapskates that - in the case of the £xx.99 vs. £xx.00 example - a penny's difference really is a deal-sweetener. :rolleyes: lol)

      If you start from an assumption that something is, you can nearly always concoct some logical-sounding theory, and adduce selective fragments of "evidence" to back it up. And you can easily convince people this way. But without real extensive testing, it's still just a nice-sounding theory.

      Just my thoughts.
      Pretty much my thoughts as well - I've personally never noticed sufficient differences in prices to establish that one is better than others. Of course there's ballpark figures like 37-47-67... but when it comes to charging 45 to 47... I just stick to 47 because it makes it easier to streamline everything in my business.

      Why do I chose 47? Everyone else is doing it
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