Is $7 really a magic number?

by traceye 33 replies
Aside from the very popular $7 script and technique made famous by jonathan leger (which is not what this post is about), do you think that the price $7 truly is a 'magic number'?

Is it really any different than $6 or $8 or $9 in terms of sales/conversions?

Do you think that a low price ebook (under 10 bucks) would be a winner regardless of a few dollars variance?

Tracey
#main internet marketing discussion forum #magic #number
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  • Profile picture of the author Andyhenry
    It's a magic number in that many people price what should be a $37 product at $7 because they have a script to do it and think for some reason that it's a good idea.

    What makes more difference is whether you're keeping the $7 or giving it to affiliates to help build a list.

    My birthday is on the 7th though, so there must be something special about the number
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    • Profile picture of the author pjs
      There was a large discussion last week that went over this in detail. Studies found that 7 is a trigger number. Search for that discussion, it will answer all your questions
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    • Originally Posted by Andyhenry View Post


      My birthday is on the 7th though, so there must be something special about the number

      Well, mine's on the 27th...but my husband's is on the 7th. As long as there's a 7 in there...
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    • Profile picture of the author Ron Douglas
      Originally Posted by Andyhenry View Post

      It's a magic number in that many people price what should be a $37 product at $7 because they have a script to do it and think for some reason that it's a good idea.

      What makes more difference is whether you're keeping the $7 or giving it to affiliates to help build a list.

      My birthday is on the 7th though, so there must be something special about the number
      This is exactly what I was going to say. People don't actually test to see what the optimal price is. Overtime you will lose a lot of money by selling a product for $7 when you can get $27, $37, $47, or even $97.

      Even if you are doing it to build a list from affiliates, do affiliates really want to promote a product with a $7 commission?

      If you're selling for $7, you should at least have an upsell. If not, you're just disrespecting the game and bringing down the perceived value of ebooks for everyone else.

      Between the $7 dollar sales, resale rights sites, and the number of crap ebooks being peddled, marketers have killed ebook market in the IM niche. It's definetly not what it once was. IMHO

      BTW, my birthday is also on the 7th (October) :-).
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      • Profile picture of the author jhongren
        If not, you're just disrespecting the game and bringing down the perceived value of ebooks for everyone else.
        Hi Ron, I love to hear about your opinion. What is your opinion for marketers who are pricing their book prices too low? Is this disrespecting the game too?

        Cheers,
        John
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      • Profile picture of the author Ryan_Taylor
        Originally Posted by Ron Douglas View Post

        This is exactly what I was going to say. People don't actually test to see what the optimal price is. Overtime you will lose a lot of money by selling a product for $7 when you can get $27, $37, $47, or even $97.

        Even if you are doing it to build a list from affiliates, do affiliates really want to promote a product with a $7 commission?

        If you're selling for $7, you should at least have an upsell. If not, you're just disrespecting the game and bringing down the perceived value of ebooks for everyone else.

        Between the $7 dollar sales, resale rights sites, and the number of crap ebooks being peddled, marketers have killed ebook market in the IM niche. It's definetly not what it once was. IMHO

        BTW, my birthday is also on the 7th (October) :-).
        Hey Ron,

        If I'm reading your post correctly, I agree with you on many of those points.

        Some markets won't convert at $47 price point (my experience anyway).
        While that might lead you decide not to be in that market, I have been able to have success in a niche like this.

        I have a $7 short ebook in a nice that a lot of people have difficulty selling anything in. I'm able to be successful because I know from testing that $47 doesn't work, but $7 does. The traffic is there for everyone, but it's a price sensative market.

        Once I've made them a buyer, then I'm more successful with converting them to the the $47 backend. While this is probably a good strategy for any niche, I just can't get this particular market to make an initial purchase at higher price points. Although I haven't tested $12 yet.

        My belief is that this particular group of buyers/informatin seekers never purchased digital products and don't see the value. Once they go through that experience and find what $7 gets them, they can't wait to see what they get for $47.

        On a related note, from the conversion rates that I'm finding with the $7 price point, I'm planning on creating and announcing a new $7 product every couple weeks or so to my list. One emails to a responsive list and you've got some quick spending money... and eventually a complete suite of products for them to choose from.

        That's the hope anyway...
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  • Profile picture of the author rwil02
    I've seen others quoted.
    James Brausch says his tests show 1, 3 and 5 are the best numbers in his testing.
    Typical example product for him would be sells for $100, and launchs with a special for $35.

    I suspect that cultural influences play one part, and habituation plays another, which would imply that the "magic number" would actually change over time (years though).

    You have to figure that at < $10 you are making SIGNIFICANT changes to your net profit with every dollar you add or remove. I would expect (using clickbank as an example) $1 + 7.5%, plus say $1 for fulfilment costs.

    at $5 you lose $2.375, leaving $2.625
    For evey dollar you add, you keep 0.925
    so
    $6 = $3.55
    $7 = $4.475
    $8 = $5.40
    $9 = $6.325

    That means that going from $7 to $8 would have to decrease your conversion rate by > 20% before it was a losing proposition, and conversely, that going from $6 to $7 will improve your profit by >25% even if the conversion rate is not affected.

    Going from $7 to $9 would have to decrease your conversion rate by >40% before it wasn't cost effective.

    Add in to that the costs of support, and you are generally better off at the higher price because the number of clients goes down, and so the support costs go down. and then the general observation that the more somone pays for something, the less likely they tend to be to ask for support or a refund...
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    • Profile picture of the author pjs
      Originally Posted by rwil02 View Post

      I've seen others quoted.
      James Brausch says his tests show 1, 3 and 5 are the best numbers in his testing.
      Typical example product for him would be sells for $100, and launchs with a special for $35.

      I suspect that cultural influences play one part, and habituation plays another, which would imply that the "magic number" would actually change over time (years though).

      You have to figure that at < $10 you are making SIGNIFICANT changes to your net profit with every dollar you add or remove. I would expect (using clickbank as an example) $1 + 7.5%, plus say $1 for fulfilment costs.

      at $5 you lose $2.375, leaving $2.625
      For evey dollar you add, you keep 0.925
      so
      $6 = $3.55
      $7 = $4.475
      $8 = $5.40
      $9 = $6.325

      That means that going from $7 to $8 would have to decrease your conversion rate by > 20% before it was a losing proposition, and conversely, that going from $6 to $7 will improve your profit by >25% even if the conversion rate is not affected.

      Going from $7 to $9 would have to decrease your conversion rate by >40% before it wasn't cost effective.

      Add in to that the costs of support, and you are generally better off at the higher price because the number of clients goes down, and so the support costs go down. and then the general observation that the more somone pays for something, the less likely they tend to be to ask for support or a refund...
      WOW! Awesome post. I *never* thought of that side of things before.

      (btw, been to Wellington lately? I love that city!)
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    • Profile picture of the author KimW
      Roger, I was with you till you said this:
      "...and then the general observation that the more somone pays for something, the less likely they tend to be to ask for support or a refund..."
      I've never seen anyone say that before, and I find that an interesting observation.
      My own personal experience is just the opposite. If I pay a premium price for something then I am more likely to ask for support or a refund if I am dissatisfied.
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      • Profile picture of the author rocker123
        I think No. 7 is also Lucky for me...
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      • Profile picture of the author rwil02
        Originally Posted by KimW View Post

        Roger, I was with you till you said this:
        "...and then the general observation that the more somone pays for something, the less likely they tend to be to ask for support or a refund..."
        I've never seen anyone say that before, and I find that an interesting observation.
        My own personal experience is just the opposite. If I pay a premium price for something then I am more likely to ask for support or a refund if I am dissatisfied.
        Down at this price level, certainly I would agree with you. But you will find many high end marketers more than happy to say that you get less grief from clients for a $500+ product than a $100 product.

        Several reasons for that.
        First is that the buyer generally has more money available, so it matters less. The "I need a refund so I can buy food" story is a common one (ask Paul Myers ) for cheap products.

        But I think that main one is that you don't buy an expensive product without research. You have to think about it and make an active decision, so you are more likely not to buy at all if you are not certain about the worth of the purchase.

        And you can also argue that the more expensive products are generally better value as they are put out by more experienced people (not always true I know)
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        • Profile picture of the author KimW
          Originally Posted by rwil02 View Post

          Down at this price level, certainly I would agree with you. But you will find many high end marketers more than happy to say that you get less grief from clients for a $500+ product than a $100 product.

          Several reasons for that.
          First is that the buyer generally has more money available, so it matters less. The "I need a refund so I can buy food" story is a common one (ask Paul Myers ) for cheap products.

          But I think that main one is that you don't buy an expensive product without research. You have to think about it and make an active decision, so you are more likely not to buy at all if you are not certain about the worth of the purchase.

          And you can also argue that the more expensive products are generally better value as they are put out by more experienced people (not always true I know)
          Now I understand what you are saying, and I agree.
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    • Profile picture of the author Harvey Segal
      Originally Posted by rwil02 View Post

      plus say $1 for fulfilment costs.
      Roger

      What do you mean by fulfilment costs ?

      Harvey
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      • Profile picture of the author Uanz
        I was born in the year 77? so does that means
        i get the magic as well? hahaha

        Lol..
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      • Profile picture of the author rwil02
        Originally Posted by Harvey.Segal View Post

        Roger

        What do you mean by fulfilment costs ?

        Harvey
        It depends on the product.

        But you might include say domain name, hosting, autoresponder, postage and CD fabrication for a physical product, your or someone elses time if your system is not fully automated...
        The first 3 are really fixed costs of course, so their per unit price decreases over time.
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    • Profile picture of the author JasonKing
      Originally Posted by rwil02 View Post

      I've seen others quoted.
      James Brausch says his tests show 1, 3 and 5 are the best numbers in his testing.
      Typical example product for him would be sells for $100, and launchs with a special for $35.

      I suspect that cultural influences play one part, and habituation plays another, which would imply that the "magic number" would actually change over time (years though).

      You have to figure that at < $10 you are making SIGNIFICANT changes to your net profit with every dollar you add or remove. I would expect (using clickbank as an example) $1 + 7.5%, plus say $1 for fulfilment costs.

      at $5 you lose $2.375, leaving $2.625
      For evey dollar you add, you keep 0.925
      so
      $6 = $3.55
      $7 = $4.475
      $8 = $5.40
      $9 = $6.325

      That means that going from $7 to $8 would have to decrease your conversion rate by > 20% before it was a losing proposition, and conversely, that going from $6 to $7 will improve your profit by >25% even if the conversion rate is not affected.

      Going from $7 to $9 would have to decrease your conversion rate by >40% before it wasn't cost effective.

      Add in to that the costs of support, and you are generally better off at the higher price because the number of clients goes down, and so the support costs go down. and then the general observation that the more somone pays for something, the less likely they tend to be to ask for support or a refund...
      This analysis does not factor in back-end profits and lifetime customer value...

      That's why it's such a difficult question to answer...

      Are you going for a higher number of front-end customers or are you going for a higher % profit on the front-end?

      There is no right answer. It depends on the business.

      -JasonKing
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      • Profile picture of the author sundulhyip
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        • Profile picture of the author rmholla
          WalMart ends their prices with a 7. So I am sure they have researched it to death.

          However that doesn't mean 7 is the magic number for every product. The only way to know for sure is to test multiple prices for your product and see which sells better.

          If I didn't have time to run tests and just wanted to start selling I would end the price with a 7. So I would use $7, $17, $27... (you get the idea) I could be leaving money on the table though. That $7 ebook might have sold just as well at $10 or $14.95.


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          • Profile picture of the author 2bwealthy
            I tend to round things off anyways so if it was $47 , I think of it as $50 anyways.
            or $37 vs $39.99 would be the same thing.
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  • Profile picture of the author jhongren
    Originally Posted by traceye View Post

    Aside from the very popular $7 script and technique made famous by jonathan leger (which is not what this post is about), do you think that the price $7 truly is a 'magic number'?

    Is it really any different than $6 or $8 or $9 in terms of sales/conversions?

    Do you think that a low price ebook (under 10 bucks) would be a winner regardless of a few dollars variance?

    Tracey
    Hi Tracey,

    I found a recent similar thread about pricing with figure 7.

    => Would You Buy A $7.00 Product Or $27.00

    Hope it will help you. =)

    John
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    • Profile picture of the author redline_nz
      At a seminar I went to recently, I was told that '7' had been market researched and tested to be the most effective number.

      That's why you have all these books with 7 in the title:
      ie.
      The 7 Habits of Highly Effective People - Stephen Covey
      The 7 Secrets to Creating Wealth - Stephen Pierce
      7 Strategies for Wealth & Happiness - Jim Rohn
      How to Make Money While you Sleep: A 7-Step Plan for Starting Your Own Profitable Online Business - Brett McFall

      Must be something in it!
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      • Profile picture of the author traceye
        Originally Posted by redline_nz View Post

        At a seminar I went to recently, I was told that '7' had been market researched and tested to be the most effective number.

        That's why you have all these books with 7 in the title:
        ie.
        The 7 Habits of Highly Effective People - Stephen Covey
        The 7 Secrets to Creating Wealth - Stephen Pierce
        7 Strategies for Wealth & Happiness - Jim Rohn
        How to Make Money While you Sleep: A 7-Step Plan for Starting Your Own Profitable Online Business - Brett McFall

        Must be something in it!
        Ahh yes, that's really interesting - thanks for that. I have seen a lot of 7 lists too. That makes total sense and does kind of answer my question about 7 being a 'magic number'.

        I wasn't looking for whether high or low priced ebooks are better (I was aware of the poll last week - that was why I was thinking about this so much), just whether certain numbers have better conversion rates.

        However my magic '8' ball might a bit jealous now.

        Tracey
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      • Profile picture of the author rwil02
        Originally Posted by redline_nz View Post

        At a seminar I went to recently, I was told that '7' had been market researched and tested to be the most effective number.

        That's why you have all these books with 7 in the title:
        ie.
        The 7 Habits of Highly Effective People - Stephen Covey
        The 7 Secrets to Creating Wealth - Stephen Pierce
        7 Strategies for Wealth & Happiness - Jim Rohn
        How to Make Money While you Sleep: A 7-Step Plan for Starting Your Own Profitable Online Business - Brett McFall

        Must be something in it!

        That's because the human brain can reasonably hold 6-7 things in short term memory at the same time before becoming overloaded.

        Not sure it translates to purchasing influence in terms of price
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        • Profile picture of the author Will Edwards
          I once sold a product for $5.50 - it did ok, but decided to raise the price to $7 (lol). Just before I did, I emailed my list to let them know they had a last shot at getting it for the $5.50 price. Result - a nice little bonus for putting my price up!

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          • Profile picture of the author johntanyishin
            I can only 777, Jackpot. I think it's a holy number as well.

            JTYS
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            • Profile picture of the author AndrewCavanagh
              I don't believe there is anything special about the number 7 in pricing and I've never seen any serious split testing that shows the 7 is special in online marketing.

              There is something to be said for having a lead in product under $10 (I'd test $9.99 to begin with...more net profit than $7).

              Your conversions MAY be higher.

              But then you also have to think about the possibility that you could be making conversions nearly as high with a $14 price point or a $19.99 price point.

              Testing your price on your sales letter is the only way to know for sure.

              Kindest regards,
              Andrew Cavanagh
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              • Profile picture of the author traceye
                Originally Posted by AndrewCavanagh View Post

                I don't believe there is anything special about the number 7 in pricing and I've never seen any serious split testing that shows the 7 is special in online marketing.

                There is something to be said for having a lead in product under $10 (I'd test $9.99 to begin with...more net profit than $7).

                Your conversions MAY be higher.
                Agreed. The only true way to know for sure is to test.

                I've been thinking a lot about this, so I'm going to do just that. Write a quick, useful report on something I know about and split test for a week with various price points under $10.

                I'll let you know how I go.

                Tracey
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                • Profile picture of the author JPaston
                  Earlier this year I tested offers at $7, $10, $9.99 and $9.97 on the main salespage. There was a better conversion at $7 and $9.97 than at $10 and $9.99.

                  I saw no difference between $7 and $9.97.

                  So from that I would have to say that '7' does make a difference, as long as it is included somewhere in a number.

                  I've also tried $15 and $17 for OTO prices. $17 converted better.

                  I'd love to see the results of others split tests. It seems to me that a few dollars here or there makes little difference to the conversion but '7' in the price does have a factor.
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