In discussing with a well-known agent the optimum price for a digital copy of The History of the World in Tweets, I contended that a couple bucks would do, and was advised to make it $1.99. I argued that my minions, unlike average people, are not so simple-minded as to fall for that old ploy, making the price a penny less than a whole dollar multiple because $1.99 sounds like a lot less than $2.00. (About a dollar less.) Heck I just went to Amazon and found a book priced at $111.98. Do they really think someone who would have balked at a $112.00 price tag on a book is gonna say, "$111.98? What a bargain."?
The agent said companies wouldn't use this ploy if it didn't work, and I said, "Yeah? Let's try a little experiment. I'll price the book at $2.06 for three days and then I'll price it at $1.99 for three days and I'll bet you $5000 that it doesn't sell any better when I drop the price."
The agent said, "$5000 is too much to bet on something so trivial."
I said, "Okay, lets make it $4999.99," and we shook on it.
So, I've now lowered the price to $1.99. I realize this makes those of you who already paid $2.06 feel like chumps, but obviously if I'd told you in advance that the price would be slashed in three days, you would have waited, and the experiment's data would have been corrupted.
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2 comments:
Many years ago the 9/10 cent on gasoline prices made a difference because it was only about 10 cents a gallon. Now everybody rounds up or, because all gas stations tack on 9/10 cents, they only need to see the first three digits.
Some years ago, a station owner made it 8/10 and the results were the same. People only consider the first digits and assume the rest are 9s. This is different than thinking 2.00 is more than 1.99. But everybody in retail wouldn't do it if they didn't need to.
I think it isn't so much people thinking 1.99 is less than 2.00 but that people see, for example, see 11.95 and think 12 dollars. They see 12.05 and think 13 dollars. We are conditioned to it.
So if a retailer stops tacking on .99 or .95, people will still add a dollar in their minds. It’s because somebody makes us do. I think the space aliens make us do it.
BTW - I have a friend who is a PHD Chemist and he analyzed carbon scrapings from Stonehenge years ago. Nothing special, just carbon from ceremonial fires.
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