That’s why almost all information products sell for $7, $17, $27… $97… $297… $2,997…
This has been received marketing wisdom for so long that nobody seems to question it any more.
However – shock, horror – it turns out that there is no credible scientific basis for this pricing strategy at all.
There have been no major studies and nobody has done any statistically significant tests to prove or disprove it.
The best guess is that someone, somewhere, way back at the birth of internet marketing said something to someone else about ending prices with a seven and it sort of grew like a massive game of Chinese Whispers.
Perhaps they even said, “Whatever you do, DON’T end your prices with a seven.”
We’ll never know.
Look and you will see it everywhere.
On TV, at the supermarket, in car lots, in newspaper ads.
It shouldn’t make sense.
We are pretty smart people. We know that $29.99 is really $30.
But knowing it doesn’t stop our subconscious brain from thinking it’s getting a bargain.
In languages that are read left to right, our brain processes digits from left to right.
Studies have shown that, the further along a chain of numbers a digit is, the less significance our brain gives it.
So, in the above example, our brain has pretty much lost interest by the time it gets to the decimal point and it ends up comparing $29 with $30.
There is also another factor at play here.
Research suggests that, when we see a price ending in .99, we subconsciously believe that the seller has priced the item at the lowest point possible.
Interesting stuff… and why good copywriting is all about talking to the subconscious, rather than conscious, brain.
But does this mean that we marketers should stop ending prices with 7 and start adding 99 cents to the end?
Who knows? Certainly not me.
It’s like anything else in marketing… you have to test it to see what works best with any particular offer.
For example, it might work with $30 versus $29.99, but it looks a bit silly with $3,000 versus £2,999.99 (or does it?).
And, just to chuck a final spanner (wrench) in the works, the converse of the ‘.99 Rule’ presumably suggests that we should avoid using it where we are trying to convey exclusivity.
For example, I have been in many an up-market restaurant where the existence of cents / pence is not even admitted.
Prices are $30 or $40 and certainly not $29.99 or £39.99 (or even $30.00 or $40.00).
I have even seen some menus where the $ / £ sign has also been dropped.
The next logical step is “If you have to ask, you can’t afford it.”
And it gets weirder.
I have recently read an article that suggests the fewer the number of syllables in the price, the more sales you will make, even where the price is slightly more.
For example, $28.10 (4 syllables) could out-perform $27.82 (7 syllables).
But I’ll save that for another time (or maybe never).
You may think this type of microscopic examination is irrelevant and a lot of people need to get out a lot more.
That has a lot of truth for most of us lone marketers who never run large enough campaigns to be able to measure the difference.
However, it’s a different story if you are a business spending millions on advertising.
All of these apparently tiny things rapidly add up and can literally make the difference between a hugely successful campaign and one that just eats money.
For the rest of us, maybe ignorance is bliss…