Abandoning the $99 sales ploy

We recently pulled off all discount codes from our website and have stopped entertaining all requests for discounts. This is because of a recent realisation that giving discounts reduces the perceived value of the addons and that it’s unfair (elaborated here).

Looking at the prices of our products through the new eyes, I noticed that the prices are set at $49, $69, $99, $399 etc. It felt odd.

“So, we don’t want to discount prices because it reduces the perceived value, yet we are selling at $1 lesser than it’s worth?”

Though not something that we are proud of now, this is a very popular sales tactic that we have been employing through the years. It’s called the left digit effect.

The left-digit effect suggests that consumers just can’t be bothered to read to the end of prices. The mind puts the most emphasis on the number on the far-left, so even though $49 is closer to $50, it’s the “4” that registers. So the price is perceived as 40-something.

We have now addressed it and all prices are now rounded and at what they are really worth.

Check it out now —

Update (5 May 2016): In the last 5 months after this change, there has been a reduction in monthly sales. To be sure that’s because of the price change, we are reverting to the old pricing and testing it out for two months.

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