In the internet marketing world there is a rule that prices should end in a 7. Looking for an ebook or information product? Chances are the price will end in a 7.
We’re all used to prices end in a 9 in the retail world – such as $19.99.
These are examples of psychological pricing, which is a theory that certain prices have a psychological impact.
The idea is the marketer wants the consumer to respond on an emotional, rather than rational basis. It’s about leveraging the buyer’s ego and self image. The general assumption is price is an indication of quality and the goal with psychological pricing is to exploit that as much as possible.
Prices ending in 99 indicate low prices and signal “this is a value”. There are several studies that have been done around using prices ending in a 9 to increase sales. This technique works, and it works well. (A google search on psychological pricing yields some interesting reading).
It’s harder to find any concrete information about the now ubiquitous 7 used in internet marketing but give it a few years and I suspect some will appear. There are theories that 7 is the most friendly number so it will increase sales but I was unable to find any definitive answers on why 7 would be superior to the use of 9 (except a sketchy looking ebook that cost $47 that I was able to resist). Some say that 7 and 9 work equally well when pricing and by using a 7 internet marketers leave $2 (or $.02) on the table on every transaction.
Odd Pricing and Art
Few artists price their work to end in odd numbers.
Given the standard of odd prices, using even prices is also essentially psychological pricing.
Nordstroms uses even prices as an indication of their quality and sophistication. They stand out in the retail world as different.
I price my work in even numbers. Work that is $5000 is $5000, not $4900. My ACEOs are priced at $40 not $39. I do this for the same reason Nordstroms does – to indicate the product I am selling is a unique one of a kind piece of art.
[ACEO stands for “art cards, editions and originals”. Originally known as ATC, Artist Trading Card, and are traded between artists. When sold to the public they are referred to as ACEOs. The primary rule for an ACEO or ATC is they be 3 1/2″ x 2 1/2″ – the size of a trading card. They are created in many different mediums and are collectible, trade able and affordable art for everyone.]
Leveraging Psychological Pricing
As an interesting study it might be fun to lower the price for 6 months to $39 and see what effect this has on sales and perceived quality. If it increases sales by 10% the loss in $1 income on each ACEO I would still come out ahead in terms of sales. This is easy to measure as I know the rate at which I sell ACEOs today.
Where would I be in terms of perception of the quality of my artwork? That would be harder to study as I’m not exactly sure how to measure this. My gut feeling is that the perceived quality of my art would not be hurt by this small change as odd pricing is a standard and my prices are high enough to distinguish my artwork as most ACEOs sell for $10-$20 range.
As artists we should not be afraid of trying out new pricing ideas. There are no rules that say we much price with even prices. There is much we can learn about marketing if we get over our need to be special and study how other people sell their goods and services.
Pricing is notoriously a difficult subject for artists as we tend to identify emotionally with our art. Spending the time to research pricing strategies, such as psychological pricing, can help us to overcome the emotion and make better choices with our pricing.
Over time I’ll be visiting several pricing strategies on MakeBigArt.com because an informed artist is an empowered artist.
Do you use odd pricing / psychological pricing with your artwork? Please share your thoughts in the comments.
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