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Ask HN: $4.99 vs. $5.00? And what do you call your premium memberships?
Two-part question. First, when naming monthly subscription prices for a premium account, do you recommend rounding to the nearest dollar, or keeping it at $_.99? e.g. $4.99 vs $5.00 vs $5.99?
Secondly, if you were to name those premium accounts, are there any names you recommend (or recommend staying away from)? Typical suggestions I've received are Gold, Premium, Platinum, Pro, Premier, Club... It depends on the context, of course, but some might seem more cliché than others.
- ErrantX 17y agoSpeaking personally $5. $.99 stuff has always annoyed me :) (mostly from having pocketfuls of change)
- wkdown 17y agoThe $.99 thing started just to psychologically cause people to think it is cheaper. At first glance, $99.99 looks cheaper than $100.00, when really what difference is a penny? I've been wishing this would go away but, unfortunately, you're starting to see even $.98 and $.97 sigh
- thismat 17y agoThis is exactly right. It's an old marketing trick, plays into your initial reaction with the price tag. And often times people will round it down instead of up, so $99.99 will be $99 dollars, saying "Man, I got this awesome painting for my wall, it was only $99" sounds more appealing than "Man, I got this awesome painting for my wall, it was only a hundred bucks".
- drhowarddrfine 17y agoActually, it started as a bookkeeping method but I don't recall how it works. If a retailer added up all his sales at the end of the day, or during the transaction, it should always end in a certain way. Odd/even? Don't recall but that's the root of the idea.
- zepolen 17y agoIt was because if something cost 9.99 and the customer gave a 10 dollar note, he would have to open the register to return a penny instead of pocketing the bill. It's also the reason those cash registers made a loud ding when they opened.
- pbhjpbhj 17y agoUltimate! Got to be ultimate .. though I named a web hosting package "Emperor" once it was only a tailored package for a previous business partner. I always round things and never go for the only $999.95 type pricing - simply because it annoys me; I probably lose out as I think the psychology of that sort of pricing actually works on people. "Wow 999.95, it's not even a thousand dollars" ...
- percept 17y agoIs it really for single-digit dollar values, or is that just an example? I ask because you could do like $19 or $24 or whatever, which is sort of a compromise between straight-up and psychological pricing. I suppose the single-digit equivalents would be $4 and $9.
- quellhorst 17y agoThis is something you should test, not ask for other people's opinions.
- mcav 17y agoProbably, but I already have a decent-sized free user base. Unless they're privy to the naming tests, they'll only be confused when they hear about different names for the same plan.
- quellhorst 17y agoRun a quick adwords campaign. Only show different prices to people coming in from Google on a landing page. You could also block that page from being indexed with robots.txt.
- IsaacL 17y agoI believe Joel Spolsky mentioned in an article that instead of marketing one of your options as the 'premium' one, market the other as the 'discount' one. That depends on what other offerings you have and your market segementation, of course.
- steveplace 17y agoIt depends. Why not split test?
- unalone 17y agoDepends on what your service is. Certain names work for certain products. "Club" suggests a certain environment that's quite separate from "Premier", and "Platinum" is another service entirely.
- pospischil 17y agoI've always liked just having a single number e.g. $5 instead of $5.00 or $29 instead of $29.99. There has been loads of research done on this topic though. Here is a quick link to what wikipedia has: http://en.wikipedia.org/wiki/Psychological_pricing http://en.wikipedia.org/wiki/Psychological_pricing
- DanielStraight 17y agoUse names that make sense. If you're only going to have one level, this isn't a big concern, but if you're going to have more, use names that are obviously related. Bronze, silver and gold is good. Business, premium and pro is bad. Who knows how they are related?
- noodle 17y agothe only practical reason to price something at $_.99 that i can think of is to keep yourself in a lower payment processing bracket. for example, amazon flex pay charges one rate for below $10, and another for $10 and up. the difference isn't large, but keeping a charge at $9.99 instead of $10 ends up netting you a few extra pennies, instead of losing 1.
- dflock 17y agoI'd be interested to hear what patio has to say about this. He sells his Bingo Card creator software for 29.99 and split tests everything. Have you ever tried split testing prices?
- patio11 17y ago$29.95, incidentally. I have never split tested the penny gap -- my feeling is that it is unlikely to make a difference in either direction large enough to justify the implementation difficulty.
- dflock 17y agoFair enough. I realized it was .95 after I posted, sorry. Thanks for the reply though :)
- pplante 17y agoI like round numbers. It keeps everything nice and easy to multiply :) As for the name of the subscription, I find this can be tough. We are launching with "Premium" for now, but we already have plans for a second level membership when some extra features are developed. When we get there the name thats being thrown around is "Tailored" since it will include a number of customization features.