Whenever you price your products, I recommend you apply psychological pricing to increase your conversion rates.
So what is psychological pricing?
It’s when you use prices like $19.99 instead of $20 or $97 instead of $100. Unconsciously, when you look at a price with psychological pricing, it seems like a better deal. Although $19.99 is pretty much the same as $20, you see a 1 as the first digit which makes the item seem cheaper. It seems like it’s a better deal than a plain $20.
The same is true for $97 versus $100. It’s almost the same price, but the first price is a two-digit number whereas the second one has three digits. So obviously, paying a 2-digit price seems like a better deal.
Now here’s a disclaimer:
I have never actually split-tested psychological pricing versus normal pricing, but I assume it converts better and that’s why I use it.
Also most e-commerce stores and brands, and even local stores, use psychological pricing. So it almost seems a bit odd if you don’t use it. Psychological pricing can help you build trust and make you come across like a legit brand. Charging an overly round price seems odd.
People are generally more attracted to odd numbers.
This is something others have found out in marketing tests. If I tell you there are around 8,000 people on my email list, it’s just less believable than if I would tell you the exact number like 8,217.
However, I don’t believe you should focus too much on psychological pricing. Yes, you should use it on your stores and in your business.
But I don’t think it’s going to make a huge difference.
The price itself, not the decimals, will have the highest impact on your conversion rate. So if you’re going to split-test anything, than test the actual price or the shipping costs. Try $19.99 versus $29.99 for the product. Or try $97 versus $297 and see what converts better.
Those big jumps in price will make the biggest difference. So don’t obsess about the decimals, focus on the part of the price that matters.
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