Price tags ending with .99 rule the stores. They are prevalent wherever you shift your view. Ever wonder why retailers do that? And you can expect certain category of products and services with price ending in 0, like $10 or $400. Even the emission of the comma in 1200 is a result of pricing studies.
9 has a pricing power. Any item that ends with .99 speaks out “great value”, “sale” and “discount”. Buyers think that it’s the lowest price it could ever have.
People round $9.99 as $9 instead of $10. Researchers call this the left-digit effect. Everybody that has a brain is susceptible to think that way because that’s just how human minds work. And we are more led to round prices on the left digit because we see .99 innumerable times.
William Poundstone on his book Priceless analyzed eight different studies on .99 prices and found that sales increase by 24% on .99 prices compared to the 10s. Kenneth J. Wisniewski from the University of Chicago conducted another study at a local grocery chain: sales of margarine increased by 65% when price was dropped from 89 cents to 71 cents; but it increased by 222% when dropped to 69 cents!
People buy more when the price ends with 9. That’s why we see a lot of .99s.
A tipped polo from Neiman Marcus is priced at $150, while a Dolce & Gabbana leopard print bag is priced at 3,425.00. Both prices are ending with 0, and both products are high end. An item whose price ends with 0 communicates premium quality.
People get satisfaction on owning an expensive product. People are convinced that prices ending with 0s are upscaled; and prestige brands love it that way. Companies wanted to keep the reputation on their products so not all can buy it and those who can buy it will love buying it.
How they write it affects how you buy it. The longer the price appears, the more expensive we perceive. This is the reason why restaurants minimize the price on their menu with 29 rather than $29.00.
Commas and cents make the price longer; hence, increasing the magnitude of the price (at least according to our brain). 1200 seemed to appear cheaper than 1,200.00. There are fewer words in “twelve hundred” than in “one thousand two hundred”, so we think of 1200 as discounted.
Have .99s lured you?