Why is it that products and services always seem to be priced following the formula $XX.99? Are we really too cheap to cough up the extra penny?
If you’re a penny collector, you might hesitant to hand over the luckiest of all currency. But frugality has nothing to do with this pricing phenomenon. According to a University of Chicago and MIT study, nine is a magic number in pricing, inducing people to buy something they might not have otherwise.
How do you price your products or services? Of course the cost of materials and the profit margin you’re looking to achieve come into consideration. But psychology should also be a key factor.
The following infographic from Blog Growth is chock full of psychologically founded pricing advice. Don’t just slap an arbitrary price tag on your newest product — adhere to the tenets of decoy pricing, anchoring, and bracketing, and watch your sales spike.