Have you ever wondered why the price of some items you buy ends with a seven?
There's actually a psychological reason for that, which businesses use in their pricing strategies to influence consumers into buying their products.
Seven is a fascinating number. It is regarded as as one of the luckiest and significant digits in religions and cultures across the world.
The number shows up a lot in daily life, like seven days in a week, seven notes on a musical scale and even seven continents surrounded by seven seas.
While no one can decide the control the number of continents and oceans there are, it does beg the question – why do so many prices end with the number seven?
Our subconscious bias can draw us to certain numbers, such as seven, something which certainly comes in handy when businesses want to up their sales and will alter their pricing accordingly. Essentially, everything is priced the way it is for a reason.
For example, if something was priced at £99.97 opposed to £100, we know that there is only a mere 3p difference but to us, that incremental reduction not only makes use of the number seven (and it's supposed luckiness) but it also resembles less of a 'full' number to the naked eye, making it seem like it's more affordable.
Author of several books that discuss pricing strategy, including 'Setting Profitable Prices', Marlene Jensen ran tests with multiple clients looking into pricing when she was studying for her PhD in 'Economic Behaviourism'. She posed questions asking how people feel about prices ending in different numbers, from $19.99 though to $19.90.
An article for Mequoda by Kim Mateus discussed Jensen's research. Kim said: "If I remember correctly, $19.97 generated a 15 per cent higher response than the loser, which I believe was $19.93. So you can actually move the response rate tremendously by changing that last digit."
Interestingly, Jensen also found that if you apply this to supermarket pricing rather than rounding off the number, then women will tend to buy more whereas men typically prefer rounded price points.
Referencing back to Kim Mateus' article, apparently nine comes in at second place in terms of pricing psychology, although the difference is almost statistically insignificant between the two and is then followed by five.
So, the supposed hierarchy of 'preferred' numbers that we tend to gravitate towards and respond more positively to are seven, followed by nine, five, and then other numbers scoring significantly lower.
Essentially, if a price ends in nine, people will round up the price, visualising the full number in their head, whereas if it ends in seven, this is less likely to be the case.
Odd numbers also appear to be less intuitive and therefore further the distance between actual price and subconscious price.
The concept of seven holding the power when it comes to pricing products seemed to have gained a lot of traction and popularity when marketer, Ted Nicholas revealed in one of his workshops that the number seven raises sales.
There's also the view that if a price ends in seven, it has been meticulously calculated, is a true reflection of a fair price and is therefore perceived as being more positive.
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