![\"Price](\"http:\/\/www.smartinsights.com\/wp-content\/uploads\/2014\/04\/pricing.jpg\")
<\/a><\/p>\nThere are several factors which I shall cover in this article:<\/p>\n
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- Should prices end in an odd numbered digit?<\/li>\n
- It is not the last digit that matters, but the first one<\/li>\n
- The sound of prices influences clicks<\/li>\n
- Choosing the right type size can increase sales<\/li>\n
- The colour of price displays affects men more than women<\/li>\n
- Should your prices be on the left or right of the page?<\/li>\n
- Do you even need to tell them it is a price?<\/li>\n<\/ul>\n
Of course, it's assumed you will have determined the price points you want to charge using market research or considering\u00a0Kotler's Pricing Model<\/a>. I wont be looking at price setting in this article, rather ideas on how to communicate prices through creative and copy.<\/p>\n
Should prices end in an odd numbered digit?<\/h3>\n
It seems that almost everywhere you look online you can buy things for $97, \u00a3147 or \u20ac27. It seems as though we have forgotten that prices can end with a digit other than 7. Some people argue for ending in a 9, suggesting that \u00a39.99 \u201cfeels\u201d cheaper than \u00a310.<\/p>\n
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Logically, of course, we know that \u00a39.99 is as near \u00a310 as you can get. But our brain doesn\u2019t always work on logic. It appears that we \u201cround up\u201d even numbers, but \u201cround down\u201d odd ones.<\/p>\n<\/blockquote>\n
So when we see \u00a39.99 our brain, subconsciously, perceives this as getting further away from \u00a310 \u2013 we think there is a growing gap, influencing us to buy because it looks like the price is getting cheaper. When you end a price in a 7 instead of a 9, the gap seems even bigger to our subconscious. That means you tend to get higher conversion rates when prices end in a 7 rather than a 9, explaining the preponderance of the figure 7 in online pricing. So why wouldn\u2019t you end in a 5 or a 3 or even a 1? That\u2019s because these digits bring in to play other psychological factors, such as the sound of the number or the influence of the first digit, rather than the last one.<\/p>\n
It is not the last digit that matters, but the first one<\/h3>\n
![\"Digits](\"http:\/\/www.smartinsights.com\/wp-content\/uploads\/2014\/04\/digits.jpg\")
<\/a><\/p>\nThe impact of odd numbers helping \u201cround down\u201d a price in our subconscious only tends to work when the last digit is high \u2013 such as 9 or 7. When the last digit is low the impact of the first digit becomes important.An example will help explain this.<\/p>\n
Let\u2019s imagine you gave a product you want to sell for around the \u00a330 mark. If you sell it at \u00a329.97 you benefit from the \u201crounding down\u201d of the last digit, the 7. But what if you made the last digit a 1? You would get slightly higher profits from each sale by selling at \u00a330.01 and you could argue that people would \u201cround down\u201d because of the final odd digit, thereby seeing a price lowering effect. That is true. But the problem now is the first digit, 3. That\u2019s obviously bigger than 2 and hence you end up with a conversion issue.<\/p>\n
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The first digit in a price \u201cframes\u201d the buyer\u2019s mind.<\/p>\n<\/blockquote>\n
When the first digit is a 2, as in \u00a329.97, we start with a low price in mind. To our subconscious mind, \u00a329.97 is considerably cheaper than \u00a330.01, even though there is only a few pence in it. The psychological gap between the two is much more substantial than the real gap because the price starts low and ends up rounding down. In reality what this means is<\/p>\n
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- you need to price with a relatively high last odd digit in order to keep the first digit as low as possible.<\/li>\n<\/ul>\n
But that still doesn\u2019t answer why 7 is more popular than 9. After all, more profit is produced by ending in 9. The issue is to do with how our mind hears prices.<\/p>\n
The sound of prices influences clicks<\/h3>\n
Research shows that the vowel sounds in prices influence whether or not we think they are high or low figures. So the digit 9 has a long vowel sound in the \u201cnine\u201d. Whereas 7 has short vowel sounds.<\/p>\n
Researchers at the University of Chicago identified this phenomenon when testing what people thought of discounts.<\/p>\n
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They found, for instance, that when a $10 item was discounted to $7.66 it was perceived as cheaper than the same item discounted to $7.22. It was found that this was due to the impact of the sound of the prices.<\/p>\n<\/blockquote>\n
Two is a longer sound than six and it appears that the length of the sound of the price influences how big we think it is.<\/p>\n
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- When setting prices you need to say it out loud to work out the length of the price sound.<\/li>\n<\/ul>\n
When people read your website a part of their brain comes into play known as the \u201cphonological loop\u201d which basically means they hear the price in their head when they look at the display on the web page. You need to ensure that what they hear is short, not long.<\/p>\n
Choosing the right type size can increase sales<\/h3>\n
It\u2019s not just the length of the sound of the price that make a difference, though. It is the size of the type you use. This is more straightforward \u2013 big type is equated with big prices and small type is perceived as a low price. So if you proudly display your prices in big type because you want to make people aware of your deep discounts, what their subconscious brain sees is something large.<\/p>\n
![\"Prices](\"http:\/\/www.smartinsights.com\/wp-content\/uploads\/2014\/04\/specialoffer.png\")
<\/a><\/p>\nConsider what many websites do by showing the old price, struck through, and the new lower price. Frequently they size the new price as bigger than the old price to emphasise the discount. But this has the reverse effect on our brains. If the old price is bigger than the new lower price, then this is the logical way around \u2013 the type size reflects the decreasing price.<\/p>\n
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If you have lower prices you need smaller type than items which are higher priced. Using type proportionally for the varying prices you have can help increase conversion rates<\/a>.<\/p>\n<\/blockquote>\n
The colour of price displays affects men more than women<\/h3>\n
Of course, web designers will probably not agree, saying you need consistency and that each design element, such as a price display, must look the same. And if you think you\u2019ll have arguments with designers over type size, there are other factors they are bound to disagree over, including the colour of the type and what position on the page the prices should appear on.<\/p>\n
When you consider colour you can find all sorts of advice on so-called \u201ccolour psychology\u201d on the web \u2013 much of which is, frankly, made up assumption.<\/p>\n
Think about what is said about the colour red. You will find plenty of references to it being a \u201cstop\u201d colour and advice saying it shouldn\u2019t be used if you want people to proceed, such as putting things into a shopping basket. That\u2019s why you can find endless examples of green buttons for shopping online, based on the theory that green means go.<\/p>\n
Sadly, the theory is wrong. Green means your brain can be relaxed \u2013 subconsciously it is taken as a signal of not having to react. Whereas red is a subconscious signal that you need to act quickly. At traffic signals you need to be quicker to deal with a red light than a green one.<\/p>\n
- When setting prices you need to say it out loud to work out the length of the price sound.<\/li>\n<\/ul>\n
- you need to price with a relatively high last odd digit in order to keep the first digit as low as possible.<\/li>\n<\/ul>\n