May 8, 2019
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Forget that '$100' pricetag. Try '$99.99' instead.
The difference between £3.00 and £2.99
Even though there is only a 1p difference between these two prices, psychologically our brain tells us the price is much smaller if the left digit is at a lower level.
“In an experiment conducted by the University of Chicago and MIT, women's clothing was used to test the left-digit effect. First, prices were set for $34, $39 and $44. To the amazement of the researchers, the items sold best at $39 even though that price was more expensive than other options.” In our minds having 9 at the end of a price can increase sales.
Apple are great at this.
For my pricing I am going to use this style as I think this could increase my sales.
My Old Pricing
£50, 100, £150
My New Pricing
£49, £95, £149.99
New Post has been published on RocketResponder
New Post has been published on https://www.rocketresponder.com/blog/the-danger-of-discounting-prices-too-often/
The Danger of Discounting Prices Too Often
You will already know about the importance of communicating with your subscribers and customers. Now we discuss the danger of discounting prices too often.
RocketResponder is a tool which allows you to ensure that important messages are always sent out regularly and on time.
This post deals with another important message which you may be inadvertently sending out if you are in a position where you set your own prices.
Obviously if you are an affiliate marketer then you don’t control the price but this information is still important to you if you offer bonuses or other extras to tempt in customers to buy from you.
Your customer will tend to have a price in their head which they consider a “fair price” for whatever it is they are buying.
This applies to everything from a can of soft drink to a new car or a luxury holiday.
If you sell goods which are at or below the “fair price” level then it is far more likely that someone will buy from you than a higher priced competitor.
Often marketers will try to give themselves an edge over their competition by lowering their prices – maybe for a holiday-themed special offer, a special sale or some other reason to discount on the normal higher price.
Similarly affiliate marketers will often include an exclusive package of bonuses to customers who buy the goods or services being promoted through their affiliate link. Bonuses could include a cash-back payment, free bonus products, free reports or free training on how to use the item being purchased.
As one off tactics – such as during an initial product launch or over a Black Friday weekend – these can be very lucrative indeed.
The danger comes if, in order to continue gaining a competitive advantage, you offer the discounted deal over and over again.
Now the discounted deal or the deal with all the added bonuses is so generally expected that this becomes the new “fair price” in the buyer’s mind.
So if you try to raise it to the old “normal” price again your customers will be less likely to buy from you and will tend to wait until you offer the discount again.
The lesson is that it is always a good marketing tactic to offer discounts – especially seasonal discounts – but don’t discount so often that the lower prices become regarded as normal in the mind of the consumer.
New! Actual Unit Price of Materials
We've just released an improvement to the way material unit prices are calculated so that they much better represent all costs involved in procuring your materials. From today, you'll now find two average costs on your materials pages:
Average Unit Cost is the listed unit price that you purchased your material at, averaged over all your expenses that you have created. This calculation is particularly good for quick direct unit price comparison when looking at different prices from different suppliers.
Average Actual Cost is the true average price of your materials, meaning that includes all discounts, shipping costs and tax amounts that you paid in purchasing the item. This can be used for price comparison on a more detailed level, as you might find that while Vendor A is cheaper with their published unit prices, their shipping fees makes their actual cost much higher than Vendor B which may have a slightly higher unit price.
We have now switched all profitability calculations around Craftybase to use the new Average Actual Cost value rather than basic Average Unit Cost as as it factors in many of oft-forgotten "hidden costs" and is thus much better representing your true margins on your products - allowing you to be much more accurate and confident in setting your prices.
Related help article:
How are the average costs for a Material calculated?