We all like to think that product or service quality is the only thing that matters in business, but that's not really the case.
Whether you like it or not, tiny details make a big difference. The exact price you choose is an example of that.
I recently had this experience with my content marketing community. I tested $294, $297, and $299. The middle one came out best.
Put a few prices against each other, and one of them will end up being the best.
But which one? You can't know for sure, but you can follow some guidelines. Here are ideas to play around with...
1. Charm Pricing
People often buy products more when the first number is as low as possible.
That means pricing something at $95, $97, $99, or $99.99 instead of $100, which makes people feel like they're only paying $90 or so instead of $100.
Some find that nines persuade best, while others have better luck with different numbers at the end. No matter what, a lower first digit usually works best for lower-priced products.
2. Prestige Pricing
This is the opposite of charm pricing. It's often used by companies that sell expensive offers.
A person buying a Rolex watch might want to feel like they're paying more, not less. A person buying a $3,000 agency service might be rubbed the wrong way by seeing a $2,999 price.
In general, the more expensive the thing you're selling is, the better whole numbers will work.
3. Novelty Pricing
Companies have been pricing things with 9's at the end of them for so long that sometimes a novel price generates more interest and conversions.
A very talented marketer friend of mine made his product $188.
That's kind of adhering to charm pricing, but it's a random number that almost nobody chooses for products. He sold that extremely well.
4. Decoy Pricing
The pricing of items around a certain item changes people's perception of it.
A classic example of this is popcorn at a movie theater. If a small is $5, a medium is $9, and a large (that's twice as big as the medium) is $10, the large seems like a great deal.
Few people will buy the medium, but it doesn't matter. That's a decoy price. The real goal is to get more people to buy the large.
5. Price Anchoring
This is another example of prices of surrounding products changing people's perception of another product.
When you see a price for something, that becomes a reference point that you use to compare other things to.
For example, an $800 mattress feels less expensive when it's next to a $4,000 one. Businesses often show people an expensive item before trying to sell them something cheaper.
6. Bundle Pricing
Many companies are happy sacrificing some of their margin if it means selling more product.
One example of that is making everything cheaper if people buy it in a bundle.
A burger, fries, and drink might cost $12 separately, but the combo meal is $9, which makes people feel like they're getting a better deal.
7. Bulk Pricing
This is similar to bundle pricing, but it usually involves buying more of one item instead of buying multiple.
I was just on a clothing website the other day, and the polo shirts were all $99 (there's some charm pricing for you).
But, if you bought three, it was only $199. That's bulk pricing.
8. Free Shipping
Ecommerce stores do a lot of things to try and increase the size of people's carts.
One of them is offering free shipping after a minimum order value.
They usually choose a number around $100 or $150, which makes people want to buy more items to get that discount.
9. "Free" Products
Nothing is ever truly free, but positioning things as free helps businesses sell more.
In the world of physical products, they'll send you something for "free" after you give them your email and pay $5 for shipping (which probably covers the cost of the product too).
In the world of informational products, you'll get a resource that's actually free, but it's usually to get your email so they can sell you something later (my free course is an example of this).
10. Free Bonuses
A friend of mine ran a sunglasses and watches store.
He was trying a bundle deal where if people bought both, they'd get 30% off. It didn't sell well.
Then, he positioned it as "buy a watch, get a pair of sunglasses for free" and started selling like crazy. You also see this in the info product world, where people write a huge list of bonuses you get when you buy their course or join their program.
11. Price Scarcity
When a price is going away, people often rush to get it.
This is the basis of all sales. People know another sale will come eventually, but the discount is still persuasive, and the scarcity still makes them act.
Examples include limited-time sales, discounts that expire, and products that rise in price over time.
12. Cross-Out Discounting
Running a sale is already persuasive.
It often gets more persuasive when the old price is crossed out next to the new one.
This solidifies the idea that people are getting a good deal by buying. It's a simple trick, but it usually leads to better results.
13. Loss Leader Pricing
Some businesses lose or almost lose money on one product to sell another.
Hamburgers are an example. Fast food companies usually don't lose money on them, but their margins are pretty small.
The real money they make is on drinks, which have extremely high margins.
14. Installments
Telling someone they can pay in installments often makes it more attractive to buy.
This is especially true for pricier items. Spending $800 on a couch might hurt. Spending $200 every 3 months for a year might feel better and be more feasible.
"Buy now, pay later" tools are becoming more and more popular on the internet, which lets you do this with less expensive items.
15. Reframing
Just giving someone a dollar amount might scare them off.
When you reframe that amount, it often makes them buy.
One common example is changing the timeframe. A $60 per month gym membership is only $2 a day. Another example is comparing to other products. $5 per month is less than a latte at Starbucks.
Which Ones Work Best?
Unfortunately, I can't tell you that.
Not because I'm keeping it a secret, but because it depends on your offer and audience.
You might find that a classic charm pricing model works and your $99 product sells well, or you might find that a novel number like $94 converts better.
This list is here to give you ideas. Now you have to test them against each other and figure out what actually works. Good luck.
