Sometimes even a few cents can have a big impact on sales. Case in point: American Express Publishing tested three price points for one of its publications. Three of the prices were within 5 cents of each other. The biggest range in price was 50 cents. But the results were significant.
Test: Starting with a control price of $19.95, American Express compared these three price points to its control price.
Before you read on, can you guess which one resulted in better sales?
Results: If you guessed $19.99 you are right! Offered at that price, compared to the control price of $19.95, the price of $19.99 resulted in 10% better sales. The worst price point was actually the lowest price: $19.49.
Why do you think consumers are more attracted to a price of $19.99 than $19.49? Email me at firstname.lastname@example.org. I will publish the best response in the next issue of Direct Marketing Update.
Note: Want to see how an offer increased profitability? See – How to dominate a market, here.