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Why prices ending in 9 sell best: MIT study

Have you ever wondered why prices at retailers usually end in the number 9? It’s not because it’s a sexy number, there is science behind it.

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pricing with nines

pricing with nines

Why the number nine is so powerful

[ba-pullquote align=”right”]Finding the right price to attach to a product or service is an art.[/ba-pullquote]Pricing your product or services may be one of the most stressful parts of owning a business. You know your service is valuable. You know there is an audience out there that understands that value. But finding the right price to attach to a product or service is an art. If you price something too high, you won’t be as successful. If you price things too low, customers may not think your service is valuable and you won’t be making what you deserve. Finding the perfect balance is important, but it’s also about knowing how customers view prices, especially prices that end in the number nine.

We’ve all seen pricing that ends in the number nine. Take purchasing gasoline, for instance. It always has the same formatting, no matter which gas station you frequent. You’ve seen it in nearly every store you’ve walked into. So, how do you take all of this and apply it to your own pricing? First you must understand the effect that ending a price with a nine can have on your customers or clients.

Experiment: women’s clothing

[ba-pullquote align=”right”]The $39 item sold the best, even better than the cheaper price of $34.[/ba-pullquote]MIT and the University of Chicago conducted an experiment with prices on women’s clothing. They had three basic prices, $34, $39, and $44. Surprisingly, the $39 item sold the best, even better than the cheaper price of $34. However, they did find that sales prices that are listed by the original price can easily beat out a price ending in nine. One reason is the mind sees the first set of numbers and registers it as priced in the 30-dollar range, even when it’s closer to the 40-dollar range. Purchasing an item for $39.99 will seem more of a value than purchasing the same item for $40 even. It’s only different by a penny, but that one penny seemingly takes the price to an entirely lower level, thus increasing the value and the deal.

Customers also sometimes prefer to pay a middle price rather than either end because it can feel as though they’re getting a great deal and it’s better quality than the lowest price. Customers are looking for bargains and value, and that combination can be difficult to come by. And that’s where you and your business come into the picture.

Pricing your own services

[ba-pullquote align=”right”]Be open to change and improvement. Be open to progression.[/ba-pullquote]When pricing your services, consider offering a few price points and end them with a nine for good measure. You may find that your most popular service is the one priced right in the middle. Don’t feel as though you’re trapped once you choose your prices. You can always switch them if they’re not giving you the response you’re looking for. Be open to change and improvement. Be open to progression. That’s when you’ll find success and reach your professional goal.

The American Genius Staff Writer: Charlene Jimenez earned her Master's Degree in Arts and Culture with a Creative Writing concentration from the University of Denver after earning her Bachelor's Degree in English from Brigham Young University in Idaho. Jimenez's column is dedicated to business and technology tips, trends and best practices for entrepreneurs and small business professionals.

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14 Comments

14 Comments

  1. Lane Bailey

    July 6, 2012 at 10:53 am

    The problem with that is real estate search. I find that most consumers search with round numbers… like $100k to $125k. Pricing at $99,999 (or even the popular $99,900) means that the house is missed by a large percentage of consumers. The other thing to keep in mind is that were aren’t talking about a pair of pants, or even a fridge. We are talking about a house. The study specifically focused on a blouse around $40. That is a LOT different than a house that might be several hundred thousand dollars. What do you think?

  2. Mike Schmidt

    July 6, 2012 at 10:56 am

    9 has halways been my number. Born on the twenty-9th, married on 9-9-81 @ 9am. Number nine, Number 9, Number n9ne…

  3. Goodcleanliving

    July 6, 2012 at 11:03 am

    @AgentGenius It doesn’t work in real estate. Cheapens listings and dodges important Boolean search basis. Counter intuitive.

  4. DanielBates

    July 6, 2012 at 1:06 pm

     @Lane Bailey By the same logic that the listing misses the $100-125 range, doesn’t it fall into into the $75-100 range? Wouldn’t a good real estate agent search a larger range for their client anyway? 
     

  5. Lani Rosales

    July 8, 2012 at 8:17 pm

    i was born in 81. do i get a prize?

  6. Mike Schmidt

    July 8, 2012 at 9:38 pm

    You are a prize, but yes.

  7. Lani Rosales

    July 8, 2012 at 11:41 pm

    i sense sarcasm, Schmidty

  8. Mike Schmidt

    July 9, 2012 at 10:26 am

    Never.

  9. Mike Schmidt

    July 9, 2012 at 10:27 am

    And you really are. My days would be less interesting without your posts.

  10. Guyn22wun1

    July 9, 2012 at 1:21 pm

    @DawnaDavies https://t.co/xyjDyodw

  11. Nanette

    July 9, 2015 at 11:19 pm

    $39.99 vs $40.

    More like the businesses think that We, People are stupid and can't do math.

    • Lani Rosales

      July 10, 2015 at 12:04 pm

      Nanette, you're totally right, and since publication of this story, more research has been done that shows that our brains have been rewired to mistrust non-rounded numbers. The major exception is real estate, because of how syndication works (someone thinks they don't want anything $150k or over, so they limit search to under that, making Realtors price homes at $149,999 to be included in said search).

  12. Pingback: The Pricing Power of 9: Does it Work? - PayMotion™

  13. Pingback: Cheeky Sales Coach Episode 20 – Pricing – The Cheeky Sales Coach

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Business Marketing

Coworkers are not your ‘family’ [unpopular opinion]

(MARKETING) “I just want you to think of us as family,” they say. If this were true, I could fire my uncle for always bringing up “that” topic on Thanksgiving…

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family coworkers

The well-known season 10 opener of “Undercover Boss” featured Walk-On’s Bistreaux & Bar. Brandon Landry, owner, went to the Lafayette location where he worked undercover with Jessica Comeaux, an assistant manager. Comeaux came across as a dedicated employee of the company, and she was given a well-deserved reward for her work. But I rolled my eyes as the show described the team as a “family.” I take offense at combining business and family, unless you’re really family. Why shouldn’t this work dynamic be used?

Employers don’t have loyalty to employees.

One of the biggest reasons work isn’t family is that loyalty doesn’t go both ways. Employers who act as though employees are family wouldn’t hesitate to fire someone if it came down to it. In most families, you support each other during tough times, but that wouldn’t be the case in a business. If you’ve ever thought that you can’t ask for a raise or vacation, you’ve probably bought into the theory that “work is a family.” No, work is a contract.

Would the roles be okay if the genders were reversed?

At Walks-Ons, Comeaux is referred to as “Mama Jess,” by “some of the girls.” I have to wonder how that would come across if Comeaux were a man being called “Daddy Jess” by younger team members? See any problem with that? What happens when the boss is a 30-year-old and the employee is senior? Using family terminology to describe work relationships is just wrong.

Families’ roles are complex.

You’ll spend over 2,000 hours with your co-workers every year. It’s human nature to want to belong. But when you think of your job like a family, you may bring dysfunction into the workplace.

What if you never had a mom, or if your dad was abusive? Professional relationships don’t need the added complexity of “family” norms. Seeing your boss as “mom” or “dad” completely skews the roles of boss/employee. When your mom asks you to do more, it’s hard to say no. If your “work mom or dad” wants you to stay late, it’s going to be hard to set boundaries when you buy into the bogus theory that work is family. Stop thinking of work this way.

Check your business culture to make sure that your team has healthy boundaries and teamwork. Having a great work culture doesn’t have to mean you think of your team as family. It means that you appreciate your team, let them have good work-life balance and understand professionalism.

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Business Marketing

These tools customize your Zoom calls with your company’s branding

(BUSINESS MARKETING) Zoom appears to be here to stay. Here are the tools you need to add or update your Zoom background to a more professional – or even branded – background.

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Zoom call on computer, but there's more options to customize.

If you haven’t had to deal with Zoom in 2021, you may be an essential worker or retired altogether. For the rest of us, Zoom became the go-to online chat platform around mid-March. For several reasons, and despite several security concerns, Zoom quickly pushed past all online video chat competitors in the early COVID-19 lockdown days.

Whether for boozy virtual happy hours, online classes for school or enrichment, business meetings, trivia nights, book clubs, or professional conferences, odds are if you are working or in school, you have been on a Zoom call recently. Many of us have been on weekly, if not daily, Zoom calls.

If you are the techy type, you’ve likely set up a cool Zoom background of a local landmark or a popular spot, a library, or a tropical beach. Comic-con types and movie buffs created appropriate backgrounds to flex their awesome nerdiness and technical smarts.

Many people have held off creating such an individualized background for our virtual meetings for one of any number of reasons. Perhaps it never occurred to them, or maybe they aren’t super comfortable with all things techy. Many people have been holding out hope of returning to their offices, thus seeing no need to rock the boat. I’m here to tell you, though, it’s time. While I, too, hope that we get the pandemic under control, I am realistic enough to see that working or studying from home will continue to be a reality for many people for some time.

Two cool, free tools we’ve found that can help you make your personal Zoom screen look super professional and even branded for business or personal affairs are Canva and HiHello. While each platform has a paid component, creating a Zoom background screen for either application is fairly simple and free.

Here’s how:

Canva is the online design website that made would-be graphic designers out of so many people, especially social media types. It’s fairly user-friendly with lots of tutorials and templates, and the extremely useful capabilities of uploading your own logo and saving your brand colors.

Using Canva, first create your free account with your email. It functions better if you create an account, although you can play around with some of the tools without signing up. The fastest way from Point A to Point B here is to use the search box and search for “Zoom backgrounds.” You now can choose any one of their Zoom background templates, from galaxy to rainbows and unicorn to library books or conference rooms. Choose an inspirational quote if you’d like (but really, please don’t). Download the .jpg or .png, save it, and you can upload it to Zoom.

To create a branded Zoom background in Canva, it will take slightly more work. It was a pain in the butt for me, because I had this vision of a backdrop with my logo repeated, like you see as a backdrop at, you know, SXSW or the Grammys or something. Reach for the stars, right?

OK, the issue with this was that I had to individually add, resize, and place each of the 9 logos I ended up with. I figured out the best way to size them uniformly (I resized one and copied/pasted, instead of adding the original size each time (maybe you’re thinking “Duh,” but it took me a few failed experiments to figure out that was the fastest way to do it).

Once you have your 9 loaded in the middle of the page, start moving them around to place them. I chose 9, because the guiding lines in Canva allow me to ensure I have placed them correctly, in the top left corner, middle left against the margin that pops up, and bottom left. Same scenario for the center row.

Magical guide lines pop up when you have the logo centered perfectly, so I did top, middle, and bottom like that, and repeated for the right hand margin. Then I flipped them, because they were showing up in my view on Zoom as backward. That may mean they are now backward to people on my call; I will need to test that out! Basically, Canva is easy to use, but perhaps my design aspirations made it tricky to figure out.

Good luck and God bless if you choose more than 9 logos to organize. Oh, and if you are REALLY smart, you will add one logo to a solid color or an austere, professionally appropriate photo background and call it a day, for the love of Mary. That would look cool and be easy.

HiHello is an app you can download to scan and keep business cards and create your own, free, handy dandy digital business card. It comes in the form of a scannable QR code you can share with anyone. Plus, you can make a Zoom background with it, which is super cool! It takes about five minutes to set up, truly! It works great!

The Zoom background has your name, the company name, and your position on one side and the QR code on the other. The QR code pulls up a photo, your name, title, phone number, and email address. It’s so nifty! And the process was super easy and intuitive. Now, If I took my logo page from Canva and made that the background for my HiHello virtual Zoom screen, I would be branded out the wazoo.

Remember there are technical requirements if you want to use HiHello on a Mac. For example, if you have a mac with a dual core processor, it requires a QUAD. However, on a PC, it was really simple.

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Business Marketing

Finally: A smart card that manages employee spending with ease

(BUSINESS MARKETING) Clever credit cards make it easier for companies to set spending policies and help alleviate expense problems for both them and their employees.

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Spendesk showing off its company credit cards.

Company credit cards are a wonderful solution to managing business expenses. They work almost exactly like debit cards, which we all know how to use, am I right? It is the twenty-first century after all. Simply swipe, dip, or tap, and a transaction is complete.

However, keeping up with invoices and receipts is a nightmare. I know I’ve had my fair share of hunting down wrinkled pieces of paper after organizing work events. Filling out endless expense reports is tedious. Plus, the back and forth communication with the finance team to justify purchases can cause a headache on both ends.

Company credit cards make it easier for companies to keep track of who’s spending money and how much. However, they aren’t able to see final numbers until expense reports are submitted. This makes monitoring spending a challenge. Also, reviewing all the paperwork to reimburse employees is time-consuming.

But Spendesk is here to combat those downsides! This all-in-one corporate expense and spend management service provides a promising alternative to internal management. The French startup “combines spend approvals, company cards, and automated accounting into one refreshingly easy spend management solution.”

Their clever company cards are what companies and employees have all been waiting for! With increasing remote workforces, this new form of payment comes at just the right moment to help companies simplify their expenditures.

These smart cards remove limitations regular company cards have today. Spendesk’s employee debit cards offer companies options to monitor budgets, customize settings, and set specific authorizations. For instance, companies can set predefined budgets and spending category limitations on flights, hotels, restaurants, etc. Then they don’t have to worry about an employee taking advantage of their card by booking a first-class flight or eating at a high-end steakhouse.

All transactions are tracked in real time so finance and accounting can see purchases right as they happen. Increasing visibility is important, especially when your employee is working remotely.

And for employees, this new form of payment is more convenient and easier on the pocket. “These are smart employee company cards with built-in spending policies. Employees can pay for business expenses when they need to without ever having to spend their own money,” the company demonstrated in a company video.

Not having to dip into your checking account is a plus in my book! And for remote employees who just need to make a single purchase, Spendesk has single-use virtual debit cards, too.

Now, that’s a smart card!

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