3 ms·
.0005% difference in margin. People's brains interpret $19.99 as significantly cheaper than $20, but as a marketing iniative, whole digit pricing may intice pe
by schraeds 15y ago
.0005% difference in margin. People's brains interpret $19.99 as significantly cheaper than $20, but as a marketing iniative, whole digit pricing may intice people looking for honest, straight forward pricing.
But don't kid yourself, adding a penny per transaction is not going to benefit the bottom line in the way your thinking.
- samstave 15y agoI have always used the following when thinking about my money: I always round up any price I see. I always round down any money I have to spend.
- grannyg00se 15y ago"People's brains interpret $19.99 as significantly cheaper than $20" Is this really true though? Is there some study that supports this? To me it seems simpler for the brain to round up to $20 when thinking about the price. I certainly wouldn't remember if something was $18.99, $19.95, or $19.99. They're all just $20 to me.
- evgen 15y agoYes, there are a ton of psych and neurological studies that back up this practice. It is one of those blind-spots in your brain. You peg on the $19 part of $19.99. If you stop to rationally consider things then $19.99 and $20 are effectively the same, but for most casual purchasing decisions you do not actually apply a significant amount of intellectual rigor. You may think that you consider $20 and $19.99 to be the same, but study after study shows that what you think that you are thinking about and what your brain is actually doing are not the same.
- protomyth 15y agoInteresting, I always feel like 19.99 = 20, but that is probably because of how my Dad taught me to add and multiply quickly by doing so rounding first then backing off from there.