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It would make more sense to have prices $40, $50, $60, where the $50 plan is always on sale for $30. Then, you effectively have a $30 and $60 plan, and the $40
by Guest0918231 6y ago
It would make more sense to have prices $40, $50, $60, where the $50 plan is always on sale for $30. Then, you effectively have a $30 and $60 plan, and the $40 is a decoy to make $30 seem like great value.
I designed a quick example below. That being said, I have no experience with pricing strategies, and I feel like this example is missing out on users and businesses that would be willing to spend $100.
https://i.imgur.com/vzaoy8q.jpg https://i.imgur.com/vzaoy8q.jpg
- listenallyall 6y ago$29 would likely work a whole lot better than $30
- csa 6y ago$28 would work better than $29... the main point still holds.
- listenallyall 6y agoyou have no evidence for that claim... the '9' effect has been studied extensively
- goliatone 6y agoSo, $39 would work better than $28?
- deleted 6y ago[deleted]
- listenallyall 6y agoWas this comment really worth exposing the fact that you don't understand why nearly every store in America prices with 9's? But since you asked... lowering the price by $11 will require 28% more unit sales to cover the difference. Normally 28% more units would increase COGS, resulting in less profit on equivalent sales, requiring even larger unit growth, but we're talking about software here so let's ignore that. Regardless, I couldn't tell you which works better without some more data. I will bet you, however, that $39 will outperform $40 in total revenue and profit.
- csa 6y agoI think you missed my point. Whether it was 30 or 29, the idea still holds, and the idea was not optimizing to the single dollar level.
- listenallyall 6y agoNo, I didn't. If you're going to optimize the article's example, why stop halfway?
- alvarelle 6y agoThe article also suggests you should start with the post expensive option (60 in your case)