People unconsciously prefer pricing that ends in "9" and "99"
Description
People tend to think the goods sold for the pricing ending with 9 are better value than those with rounded prices.
Our brains process numbers extremely quickly, making snap judgments about prices and values without any conscious awareness.
When seeing the price of $299, we don't see $300, we see $200.
Research:
In their research, Gumroad analyzed all the items on their site under $6, where the price ended in either 99c or a round dollar figure.
The conversion rate for items with a Charm Price was 3.5%, compared to 2.3%. That’s a 51% difference!
In another experiment, the fashion store was selling the exact same dress, but with 3 different prices: $34, $39, and $44.
The dress that was priced at $39 outsold the other two.
According to CBC Radio, in 2014, over 60% of all products were priced along the charm pricing principle.
Application
Personalized Marketing Communications
When listing products on an e-commerce website, using charm pricing can make products appear more affordable and enticing to consumers. For instance, pricing a product at $19.99 instead of $20.00 can create the perception of a significant price difference, even though it's just one cent less.
