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Ask HN: I want to charge $50 for some service. Should I set the price to $4X.XX?

10 points by juskrey 8y ago

Some context - purely electronic one-time (with potentially returning customers) transaction for pretty common type of website/informational services

ggm 8y ago
Sales taxes and other costs are going to get you to $50.01 somewhere, sometime. So, you need to be mindful the mythical exact-dollar-units price probably won't exist for many purchasors (think forex) That said, $49.99 is .. its just evil. Its playing on psychology of numbers. and $49.95 is even eviler.
- juskrey 8y ago
  > That said, $49.99 is .. its just evil. Its playing on psychology of numbers. and $49.95 is even eviler. Everyone seem to agree on this, but is it, well.. really so? Does it have real benefits out of the veg souk? Or even worse, if people see it as evil.. I can lose customers instead..?
  - EADGBE 8y ago
    > Or even worse, if people see it as evil.. I can lose customers instead..? In my experience, customers leaving over $.01 or $.05 are customers not worth having.
- cm2012 8y ago
  lol at $49.99 being evil. You need to recalibrate your good and evil meter. Another phrasing for "playing on the psychology of numbers" would be "Using language that makes the customer more comfortable." Is it evil psychology to say "please" and "thank you" to people walking into your shop (also will likely increase sales)? Or evil psychology to learn to use appropriate metaphors when giving a speech? Is it evil to use a nice font rather than comic sans? Because people are provably more comfortable buying low value items with .99 at the end. You make them uncomfortable with the purchase by rounding up, and either way, you are going to be rationally choosing one of the options. On the other side with your logic, by pricing as a whole number, you are using evil psychology to persuade your customer that what you're selling is a higher quality and more expensive item. So evil!
taprun 8y ago
Go to a fast food restaurant and look at the prices. They'll probably end in .99 because the owners are competing (at least partially) on price. Now go to a fancy restaurant and look at the prices. They'll probably end in .00 because the owners don't want to look like they're competing on price. What kind of brand are you trying to build?
- juskrey 8y ago
  This is a good point. E.g. DigitalOcean is not pricing in .99s while virtually all of their competitors are.
- switch007 8y ago
  Also fancy restaurants: Soup du jour 8 Pork belly 24 Cheese selection 12 (One is left to assume it's a price, in your local currency...)
  - EADGBE 8y ago
    Go somewhere fancy enough and there's not even a price on the menu...
    - IpV8 8y ago
      Go somewhere even fancier and there is no menu...
      - thedevindevops 8y ago
        ...buffet?
        toyg 8y ago
        No, the chef decides what you’re going to eat. Because at that level, you pay for an original culinary experience, not to eat a well-cooked version of your favorite dish.
        8y ago
jklein11 8y ago
Why not A/B test it?
- kardos 8y ago
  Because if any of the A group discuss with the B group your going to get confused people that think you're price discriminating
  - jklein11 8y ago
    Are they really going to complain about the $.01 or $.10 or $1 price difference? And even if they do can't you just give them the lowest price?
    - kardos 8y ago
      It doesn't matter if they would complain, I just said they'd be confused. Why add a potential sticking point? It sounds like OP is trying to sell a new product, playing pricing games at these early stages is a big distraction. Someone up thread said charge $49 without cents -- go with that and get on with making the product better.
  - markfer 8y ago
    That's such a minute chance of happening, it shouldn't be a concern in the slightest
    - juskrey 8y ago
      The chance may be a minute, but this can have great reputational consequences. And, to begin with, I consider such practice immoral, even if it is a difference of 0.01. In a goods shop you may fit such an experiment, maybe, with marginally different items, but not with your main product for sure.
saluki 8y ago
For online info products and SaaS subscriptions go with a price of: $49 (no cents) $49 gets more signups than $50, I don't have a source handy but I've seen it in multiple articles and have tested it with SaaS apps I develop/maintain.
EADGBE 8y ago
Yes. The price "seems better" even if it's a penny less. When I was 8 or 10 I worked on my grandparent's farm. We grew hydroponic tomatoes. We sold them in ~1 lb bundles for $4 a piece. One day we switched to $3.99. It was a noticeable difference in how quickly we sold them. Folks perceive a lesser price as better value, even if it's in the smallest increment possible. If it works on tomatoes, it'll work on anything. https://www.google.com/search?q=psychology+of+selling+at+.99&oq=psychology+of+selling+at+.99&aqs=chrome..69i57.6448j1j1&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=psychology+of+selling+at+.99...

10 points by juskrey 8y ago

Some context - purely electronic one-time (with potentially returning customers) transaction for pretty common type of website/informational services

ggm 8y ago

Sales taxes and other costs are going to get you to $50.01 somewhere, sometime. So, you need to be mindful the mythical exact-dollar-units price probably won't exist for many purchasors (think forex) That said, $49.99 is .. its just evil. Its playing on psychology of numbers. and $49.95 is even eviler.

juskrey 8y ago
> That said, $49.99 is .. its just evil. Its playing on psychology of numbers. and $49.95 is even eviler. Everyone seem to agree on this, but is it, well.. really so? Does it have real benefits out of the veg souk? Or even worse, if people see it as evil.. I can lose customers instead..?
- EADGBE 8y ago
  > Or even worse, if people see it as evil.. I can lose customers instead..? In my experience, customers leaving over $.01 or $.05 are customers not worth having.
cm2012 8y ago
lol at $49.99 being evil. You need to recalibrate your good and evil meter. Another phrasing for "playing on the psychology of numbers" would be "Using language that makes the customer more comfortable." Is it evil psychology to say "please" and "thank you" to people walking into your shop (also will likely increase sales)? Or evil psychology to learn to use appropriate metaphors when giving a speech? Is it evil to use a nice font rather than comic sans? Because people are provably more comfortable buying low value items with .99 at the end. You make them uncomfortable with the purchase by rounding up, and either way, you are going to be rationally choosing one of the options. On the other side with your logic, by pricing as a whole number, you are using evil psychology to persuade your customer that what you're selling is a higher quality and more expensive item. So evil!

taprun 8y ago

Go to a fast food restaurant and look at the prices. They'll probably end in .99 because the owners are competing (at least partially) on price. Now go to a fancy restaurant and look at the prices. They'll probably end in .00 because the owners don't want to look like they're competing on price. What kind of brand are you trying to build?

juskrey 8y ago
This is a good point. E.g. DigitalOcean is not pricing in .99s while virtually all of their competitors are.
switch007 8y ago
Also fancy restaurants: Soup du jour 8 Pork belly 24 Cheese selection 12 (One is left to assume it's a price, in your local currency...)
- EADGBE 8y ago
  Go somewhere fancy enough and there's not even a price on the menu...
  - IpV8 8y ago
    Go somewhere even fancier and there is no menu...
    - thedevindevops 8y ago
      ...buffet?
      - toyg 8y ago
        No, the chef decides what you’re going to eat. Because at that level, you pay for an original culinary experience, not to eat a well-cooked version of your favorite dish.
      - 8y ago

jklein11 8y ago

Why not A/B test it?

kardos 8y ago
Because if any of the A group discuss with the B group your going to get confused people that think you're price discriminating
- jklein11 8y ago
  Are they really going to complain about the $.01 or $.10 or $1 price difference? And even if they do can't you just give them the lowest price?
  - kardos 8y ago
    It doesn't matter if they would complain, I just said they'd be confused. Why add a potential sticking point? It sounds like OP is trying to sell a new product, playing pricing games at these early stages is a big distraction. Someone up thread said charge $49 without cents -- go with that and get on with making the product better.
- markfer 8y ago
  That's such a minute chance of happening, it shouldn't be a concern in the slightest
  - juskrey 8y ago
    The chance may be a minute, but this can have great reputational consequences. And, to begin with, I consider such practice immoral, even if it is a difference of 0.01. In a goods shop you may fit such an experiment, maybe, with marginally different items, but not with your main product for sure.

saluki 8y ago

For online info products and SaaS subscriptions go with a price of: $49 (no cents) $49 gets more signups than $50, I don't have a source handy but I've seen it in multiple articles and have tested it with SaaS apps I develop/maintain.

EADGBE 8y ago

Yes. The price "seems better" even if it's a penny less. When I was 8 or 10 I worked on my grandparent's farm. We grew hydroponic tomatoes. We sold them in ~1 lb bundles for $4 a piece. One day we switched to $3.99. It was a noticeable difference in how quickly we sold them. Folks perceive a lesser price as better value, even if it's in the smallest increment possible. If it works on tomatoes, it'll work on anything. https://www.google.com/search?q=psychology+of+selling+at+.99&oq=psychology+of+selling+at+.99&aqs=chrome..69i57.6448j1j1&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=psychology+of+selling+at+.99...