Something being priced at £99.97, just 3p away from £100, makes an important difference in customers’ minds. Not only does the number seven bring supposed luck but to the naked eye, a number that isn’t full, which would be the case with 100, seems 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 through to $19.90.
Jensen also found that in the context of supermarket pricing the attitude toward numbers varieties by gender. While women are highly influenced by this strategy, this isn’t so much the case for men, who are more attracted by rounded price points.
Discussing Jensen’s research in an article published in Megouda, Kim Mateus says: “If I remember correctly, $19.97 generated a 15 percent 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.”
Mateus also discusses the psychological value of number nine, which she says ranks in second place in terms of price point popularity. Number five is third.