Is there an unwritten rule on Price structure?

by Lee Jones 5 replies
It's apparent to me that most Internet Marketers follow an unwritten rule of including 7 in their pricing structure

$27 $47 $97 etc.

Can anyone explain why this is?

I realise this has probably been asked before, but a search revealed nothing, so I would appreciate any help and advise.

Lee
#main internet marketing discussion forum #price #price structure #rule #structure #unwritten
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  • Profile picture of the author BIG Mike
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    • Profile picture of the author VinceNouvel
      PPl just like to follow the crowd and most of the IM crowd have used to this kind of price point. I don't know any anything from psychological view points. + I heard this from Frank kern that someone in the early IM have tested this and it appear to be the most effective..
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      • Profile picture of the author Jeff_Gardner
        Actually, it dates back to pre-IM.

        Ted Nicholas, the famous direct-response marketer, said that in $200 million in tests, he discovered that the 7 at the end of your price worked the best.

        Hence, for years, direct response marketers have used prices like $27, $47, $97, etc.

        Is there truth to what Ted said? Well, I respect Ted immensely - because of his years of testing and marketing experience. Having said that, I haven't seen the actual tests being done - so it's hard to verify. However, most people take Ted on his word.

        Plus, let's be honest: There is something about the 7's in these prices. $27, $47, $97, $147, $197.

        BUT - I still use prices like $19.95... $29.95... $49.95... etc. - for a lot of direct mail offers. I still like $995... $1,495... and $1,995.

        I'm not convinced that $1,997 will actually outpull $1,995 - if the offer is killer - so I rarely worry about it on bigger products.

        On smaller products... it depends if it's online or off - and if it's to the IM market. If it's to IM'ers, I may drop in the 7... just because they seem to expect it.

        Honestly - even with all of this talk of pricing, I'm more interested in the value the customer will put on the product - and then pricing it cheaper. I rarely stay up nights asking myself, "7 or 9"?

        Best,
        Jeff
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        • Profile picture of the author Erum Munir
          It isn't so much about it ending with 7 or 9. It is the psychology behind it.

          For example take $19.99 and $20.
          Basically the same thing - what is one cent!

          But somehow your brain classisfies it in a lower price range because the number starts with 1 and not 2.

          So if you were to have 17 that will serve the same psyche.

          I guess people have wizened up and round off 19.99 to 20 in their minds but 17 is still a bit further away thus keeping that psychological advantage.

          Not to mention the fact that a lot of people take 7 as a lucky number.
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          • Profile picture of the author Lee Jones
            I guess i'll just use what everyone else uses

            Seams to work for them !
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  • Profile picture of the author sparrow
    My whole concept around this has always been around testing

    alot of this started by the masters in marketing many eons ago and I am sure have some validity

    I think factors come into play when your offer maybe similar to what is out there or approach borderline price objections

    but all in all it is about your offer, not the price

    once you have the offer correct and cannot be improved maybe the next step is testing the price

    for me I have been testing this pricing strucure and have never seen anything in my wallet that it works

    I could see if your selling commodity types of products this might be effective

    Ed
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