16 ms·
I never like thinking of pricing in this way. When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Wherea
by throwaway13337 2y ago
I never like thinking of pricing in this way. When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest.
Integrity means a lot. The software I sell is priced in whole numbers.
However, the magnitude of effect claimed in the article is huge. It's the difference between selling at cost and a huge margin. Between doing well and shutting down your business.
Given the replication crisis is worst in these types of studies - the kinds of studies that beg to be the subject of TED talks - you have to wonder how reproducible these effects are.
Are we selling our integrity for bad science?
https://en.wikipedia.org/wiki/Replication_crisis https://en.wikipedia.org/wiki/Replication_crisis
- tracerbulletx 2y agoRetailers don't do this because of published studies. They do it because they've tested it internally for the last 40 years.
- throwaway13337 2y agoThat may be true but we don't know that it is true. When I started my selling software, I priced with something.99 too. I did this because everyone else did. I was unfamiliar with these sorts of things so I followed on. I am sure that in some business at some point, there was a big positive in switching to that sort of pricing. When I switched my software to whole numbers, I did not notice a drop in sales. Things continued to grow. Of course, my business is one data point and a small one. How much of why we tend to do this is because, historically or normally, that is how we've seen it done?
- elevatedastalt 2y agowhat sort of software were you selling? Was it an app that is priced under 10 bucks? That would be very different from some enterprise software costing $500.
- ksec 2y agoBecause you are selling software and your target audience are either business, enterprise or computer engineers. The trial of whole number pricing keeps coming up in Consumer and Retail every 10- 15 years and EVERY time the test shows .99 works. Despite how most of us and even my younger self hated it.
- satvikpendem 2y agoIndeed, marketers aren't stupid (but it turns out people in general are stupid, enough to fall for this trick and many others).
- Nevermark 2y agoWhen it is so well known, at some point it isn’t a “trick” anymore, right? It isn’t as if retailers can fight reality. Or that they can “come clean” by putting fine print under prices explaining why they are ending prices in 9. Which would create a major distraction messing with any sale. It is just real-world reliable wackiness that both sellers and purchasers should be aware of. There is no purely objective way to relate to selling and purchasing prices. Short of very simple scenarios where a spreadsheet actually captured all the real criteria. Many products make people happier if the price is higher. Is that happiness bump a fraud, or the point? Just remember to ask for $199,999.99 salary in your next interview!
- satvikpendem 2y ago> Or that they can “come clean” by putting fine print under prices explaining why they are ending prices in 9. Which would create a major distraction messing with any sale. Why would they do that? That might lessen their sales if people knew of the effect, as a nocebo.
- Nevermark 2y agoI agree(d). > Which would create a major distraction messing with any sale.
- indymike 2y ago> That may be true but we don't know that it is true I think a walk through a shopping mall might provide some clear evidence.
- qup 2y agoIt'll provide evidence that they've studied it internally? I don't think so.
- indymike 2y ago> I don't think so. OK.
- swores 2y agoThey were being polite because you were flat out wrong: a walk through a shopping centre gives you absolutely zero information about whether prices chosen have been tested or were picked by throwing darts at a calculator. It just tells you what prices those shops have chosen to sell things for, nothing at all about the reasoning behind those prices.
- qup 2y agoIn fact it seems really bad logic to assume that they would all arrive on the same price, had they actually done any real study. There would be some outliers or weird niche customer populations.
- kevin_thibedeau 2y agoThe final answer here gives clear indication of psychological bias toward left digits: https://skeptics.stackexchange.com/questions/2359/the-origin-of-99-cents https://skeptics.stackexchange.com/questions/2359/the-origin...
- mcmoor 2y agoI thought it's notorious that sometimes they also don't know what they're doing, being carried by trends and vibes. "Half the money I spend on advertising is wasted; the trouble is I don’t know which half"
- chrisjj 2y agoThe advertiser who knows half his spend is wasted is the one who /does/ know what he's doing.
- Hasu 2y agoYes, that's the point of the quote, but the point of the poster you're replying to is that wasting half your budget would be considered gross incompetence in any other department. "Half the lines of code I write are useless, I just don't know which half." - an incompetent coder "Half the time I spend on the phone is wasted, I just don't know which half" - an incompetent salesperson "Half of my menu is inedible, I just don't know which half" - an incompetent restauranteur
- tpmoney 2y agoI don't know, you see plenty of people stating they only do X hours of real work in a given day. That sounds an awful lot like the same basic idea. If I think about it too, half the lines of code being wasted is probably a relatively reasonable measure for writing code. Not because they're actually literally useless, but because you write a lot of scaffolding, a lot of first passes and a lot of code that will be a dead end or superseded before you're done. If you knew before you started exactly what lines of code you'd need to write, you'd be much more efficient, but we don't, so we write a lot of "waste" code too.
- chrisjj 2y ago> the point of the poster you're replying to is that wasting half your budget would be considered gross incompetence in any other department. Not if there too a spend of X was required to get the value of X/2.
- 2y ago
- TaylorAlexander 2y agoSure but should we believe that internal studies at retail chains are quality scientific studies?
- dfox 2y agoWell, it is tested internally for at least 100 years: https://en.wikipedia.org/wiki/Tom%C3%A1%C5%A1_Ba%C5%A5a https://en.wikipedia.org/wiki/Tom%C3%A1%C5%A1_Ba%C5%A5a
- subroutine 2y agoAnd many physicians still recommend putting ice on sprained ankles 5x per day to reduce the “harmful” swelling. Even though the abundance of research now shows icing delays the infiltration of proteins, hormones, and cells that aid in healing processes (and can even cause further tissue damage). Practices like this stick around because of the desire to be seen making proactive recommendations with putative benefit. With the dresses there is clearly something odd happening. In all cases except one the cheapest dresses sold the fewest items even compared to ones that were $10 more expensive.
- Ctyra 2y ago> Even though the abundance of research now shows icing delays the infiltration of proteins, hormones, and cells that aid in healing processes (and can even cause further tissue damage). Do you mind sharing any references
- compressedgas 2y agohttps://drmirkin.com/fitness/why-ice-delays-recovery.html https://drmirkin.com/fitness/why-ice-delays-recovery.html
- mhb 2y agoWhen I was looking for evidence about the efficacy of ice to speed recovery, I found it very challenging. I would be grateful if you could share some of the abundance.
- amelius 2y agoThe human body (through evolution) only cares about long term effects for the human species. The actual human might care about pain. Therefore, I don't think that the advice is necessarily bad. Evolution isn't always our friend. There are many examples where our bodies work against us, only to help us evolve better as a species.
- dennis_jeeves2 2y ago>Practices like this stick around because of the desire to be seen making proactive recommendations with putative benefit One manifestation of this phenomenon in it's extreme form is cancer diagnosis and treatments. Barring a few exceptions, most cancer treatments are useless.
- ChrisMarshallNY 2y agoYup. It's been settled lore, for retailers, as long as I can remember. I don't think they care about metrics. That doesn't cheapen metrics, however. Some pretty meaningful (and, often, annoying) stuff has come from them.
- phito 2y agoYep it's not science, but engineering
- agumonkey 2y agoReminds me of people who tried selling sturdy repairable phones with longer battery life. Even when people complained about battery issues etc. They kept buying the thinnest flagship. Mass markets are mass market.
- chmod775 2y ago> Reminds me of people who tried selling sturdy repairable phones with longer battery life. My brother buys these. They survive up to a year in his "care", rather than the usual 3-4 months of flimsier phones. They all end up with cracked screens within months though. Almost no mainstream consumer electronics nowadays are meant for people who lead active lives (outside of planned and streamlined activities like going to the gym or running) - because the people as a whole generally don't live active lives. If you happen to be an outlier, making your phone survive becomes a serious logistical issue. Sadly carrying one is a necessity in this day and age. Another example: Many offroad vehicles/trucks nowadays won't survive days of the advertised use-cases without serious damage and are often utterly unsuited for it (the cybertruck isn't an outlier here). These things are being sold to people who like to play pretend. Manufacturers cross their fingers and hope you don't actually. Notable exceptions to the rule are things like satellite communicators and some dedicated GPS map devices. They seem to have no issue surviving many phones with their own screens and functionality intact. Their manufacturers know you wouldn't buy them if you didn't plan to use them in the advertised conditions.
- dieselgate 2y agoIndeed, regarding watercraft have seen it as “you don’t sell the boat you sell the dream”
- ThrowawayTestr 2y agoGet your brother a glass screen protector for his phone. I haven't cracked a phone screen in a decade yet I've gone through many cracked screen protectors.
- chmod775 2y ago
- hulitu 2y agoFor me 9.99 is 10. I don't know what they tested, but maybe they shall test again.
- feetsoup 2y agoThat's easy to say, but when it comes to shopping at the store, picking up several items and not actively thinking about it, are you really sure you aren't unconsciously interpreting that 9.99 differently from 10? Personally, I like to think that doesn't work on me, but at the same time I've caught myself saying something was '9 dollars' when I've been distracted and it was in fact 9.99. And even if 9.99 really is 10 for you, it could mean that you're different than most people, rather than the methodology being faulty.
- johnisgood 2y agoI found it odd that my girlfriend would say out the cents, because personally I have always been rounding up, and never considered the cents, for example.
- HocusLocus 2y agoI try to keep two things in my head when filling a grocery cart, an accurate tally of dollars and a numberless sense of "where in the dollar the cents remainder is presently", like the position of a progress bar on a screen. I find a remembered visual progress bar does not distract me from the arithmetic, and when I spot one of those silly prices ending in .95 or .99 the bar resets to a tiny bit and I add a dollar. My mental progress bar generally jumps in approximate ~1/4 steps and when the total is accurate to within $2 with many items that is a win.
- throwawaysleep 2y ago> Integrity means a lot. Does it? Has anyone priced out the premium integrity can command? As anecdotally, it doesn’t seem to matter unless you have a sterling reputation. People with merely a good integrity reputation are better off selling it off until they are low ish integrity. And if you compete on price, may as well abandon it entirely.
- deleted 2y ago[deleted]
- chrisjj 2y agoAgreed. And a sterling reputation may mean only good at hiding disintegrity.
- tlogan 2y agoThis is just psychology. Also everyone is doing this, and that’s a fact. If you do it differently, people will think there’s something wrong
- agumonkey 2y agoI'm fascinated by these involuntary social protocols. Same as being too honest when everybody is spreading white lies. You end up being the bad one. I wonder what field studies those.
- add-sub-mul-div 2y ago> Are we selling our integrity for bad science? Are we selling our inner peace for outrage over minor things?
- pluc 2y agoI'm doing that these days at the grocery store. If your shit ends in an odd number, I'm assuming it's been shrinkflated. OJ bottle of 1.87 liter? Pass.
- galdosdi 2y agoWhat? Why don't you just look at unit prices instead? That's the only price I ever look at and other than edge cases like trying new things or goods that you can't use up fast enough, there's no reason to look at anything else. If your store doesn't have them, that's a sign you're at the wrong store and everything is overpriced. Teach your kids this PS: Walmart, which has pretty good prices, is famous for odd prices everywhere, so your heuristic would fail. All in all, really, a heuristic like this is a pretty weak way to try to be frugal and I can't recommend it. Just check the unit prices and shop at Aldi. Buy commodity ingredients, not trademarked factory food products. You can't help but spend a fraction of what other folks do when you just buy commodities by the unit price at a store serious about prices.
- ianburrell 2y ago1.87L is 0.5 gal. The product is from the US since half gallon is common size and they didn’t bother changing the size. There are products in US that are in nice metric sizes and weird US sizes. Like the 2L soda.
- pluc 2y agoAin't no reason I should have to buy a US product
- __cayenne__ 2y agoIn 2012, JCPenney launched their "Fair and Square" pricing campaign, which included adopting whole number pricing. This campaign was considered a significant failure and is attributed with causing a 20% decrease in sales.
- silverpepsi 2y agoI don't think we can draw any conclusion from that campaign because multiple variables were changed simultaneously The biggest ones in my mind, the ones my family had always played: they got rid of the game playing involved in buying during sales windows. This eliminated both the urgency to buy and the fun of feeling you were getting a deal other people weren't (this is all from memory I'm afraid)
- jszymborski 2y agoHard to control for this though. How did other department stores do in 2012? I doubt e.g. Sears were putting out great numbers.
- eastbound 2y agoThe funny unique characteristic of the economic science is that it’s almost the only science without experiments. We can have a multitude of tests and get close to reality, but it’s impossible to reset the initial environment, control variables or test in isolation. You can’t reset people’s minds, so reproducing twice on the same island won’t give the same results, reproducing on two islands won’t either, and reproducing with 3 months delay won’t put you in the same season. Even biology and psychology are much more controllable. It’s definitely a science, but with the same criticism as chess being a sport.
- jszymborski 2y agoI don't disagree at all with any of what you have to say, but indexing returns to a "category" does go some way toward accounting for e.g. the overall decline of brick-and-mortar retail and malls.
- 2y ago
- aaron695 2y ago[dead]
- chrisjj 2y ago> When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest. Singalling is honest too, y'know. :)
- pc86 2y agoI hope your prices end in 0 and are nice round numbers. There was a time when all the software and info products were whole numbers but ended in 7 for the exact same reason. "$10 is honest and $9.99 is manipulative" is pretty reductive.
- TechSquidTV 2y agoYes but it turns out humans don't think critically most of the time.
- seydor 2y agoTo me .99 signals that you care for affordability. Luxury products don't care about that. That's why apple's pricing looks odd to me. Expensive prices minus one dollar
- Sightline 2y agoThat's not affordability, that's tricking someone into buying something that they wouldn't have otherwise.
- johnnyanmac 2y agoIf they buy something becsuse it's a penny cheaper, who's really being tricked?
- Sightline 2y agoThe consumer. $0.01 doesn't make it affordable, it's just a mind trick. You seem to be aware of this, yet you're defending it.
- johnnyanmac 2y ago1. To be frank, I'm not dying on a hill for a penny. A fool and his money... 2. Even if you point it out... What changes. Has anyone ever seriously reconsidered buying a product when you tell them it's $500 instead of $499? What's the harm being done here? 3. What call to action are you suggesting? I'd rather work for laws to include sales tax in US goods' prices than fix this "mind trick". I can't tell you how to live your life. But those are the reasons I don't really care.
- feetsoup 2y agoRegarding point 2, it seems strange to ask 'what changes?' when the point of the article you're commenting on is showing how and why you spend more when presented with 9-ending items. If it was found to make consumers spend 8% more, quite a lot changes - and in a time of unprecedented household debt in the US, it seems like tactics contrived to get people to spend more are very much worthy of discussion. Either way, it's a bit disingenuous to frame it as 'just a penny' (the actual quantity of money being spent isn't the point, it's the effect on people's spending habits) and bringing up some other problem to nullify concerns around this one is just bald-faced whataboutism. You can say you don't really care, and that may be true about addressing the problem, but making arguments for why this isn't actually a problem suggests you care about the topic in a way that compels you to dismiss it, at the very least.
- pavlov 2y agoI wonder if adding a bit of randomness to the lower-order digits would make pricing seem more deliberate than manipulative. If a product in a store is $9.86, it suggests there’s a reason for the specificity. The same product at $9.99 feels like it’s priced at the maximum they can get away with.
- johnnyanmac 2y ago> When you price something as $9.99, you're signaling to your customer that you're trying to manipulate them. Whereas a flat $10 is honest. JC Penney effect. They do it because it works. And most consumers don't reward honesty with better business. It sucks but at this point it's on the consumer. And JC Penney was barely more than a decade ago. This phenomenon has been practiced for decades. >Given the replication crisis is worst in these types of studies - the kinds of studies that beg to be the subject of TED talks - you have to wonder how reproducible these effects are. Forget the lab tests, there's more than a few other live experiments to study (not just JC Penney, though I'm not sure if they did this even back then).
- kaba0 2y agoI mean, given that this pricing is used everywhere by basically every commercial body on Earth, and it is a pretty easily testable hypothesis (like, literally, you need like 30 people at most and a couple of sheets of paper), it’s pretty damn trivial to claim that.. most probably the whole market has done its homework and it is trivially reproducible.
- fredstar 2y agoI agree in part. We should have more people checking science like this project: https://en.wikipedia.org/wiki/Reproducibility_Project https://en.wikipedia.org/wiki/Reproducibility_Project Overall I feel (and have no proof) that science is under pressure from so many angles. Climate change denial, conspiracy theorists and, as you ask, way more subtle things like overhyping marginal effects.
- moi2388 2y agoPeople in stores don’t calculate. People who buy software do. Like actual calculations: $10 / month / user * 100 users In a store people often don’t even look at the price, just”I see cheese. Oeh, LESS than $3?” Completely different target group