Home Coffee product Creators can hurt their sales by using prices ending in 99 cents

Creators can hurt their sales by using prices ending in 99 cents

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It’s so common that many choose it by default: an item price that ends in 99 cents, the idea being that by reducing the figure to one cent, consumers will be made to perceive the product as cheaper. than it really is. This little psychological feat could backfire, however, at least according to a new study from Ohio State University.

It is common, for example, to see an item priced at $ 19.99 rather than the same $ 20. While this could cause someone to purchase an item that they would otherwise shy away from if it started with a ‘2’, new OSU research has found that it can also result in additional low upgrades. cost seem more expensive than they actually are. According to the researchers, someone is less likely to buy an upgrade or a more expensive version of something if the base amount ends at 99 cents.

An example given is the use of $ 19.99 instead of $ 20; in this case, consumers may perceive the price increase from $ 19.99 to $ 25 as more expensive than from $ 20 to $ 26, even though it is the cheapest option. Researchers call it the threshold-crossing effect, noting that it can apply to everything from getting the coffee shop bigger to buying a trim upgrade for a car.

To test this, the study consisted of selling coffee to students on the OSU campus. Sometimes the coffee could cost $ 0.95 for a small cup and $ 1.20 for a large cup; at other times it would cost $ 1 / small and $ 1.25 / large. These prices are the same, but almost twice as many people opted to upgrade to a large cafe when the small cup started at $ 1.

This effect has to do, in part, with how humans perceive the cost of things and the emotional component of perceiving whether the price seems fair and fair. However, the effect is not always evident when it comes to purchases, with the study noting that consumers familiar with the typical costs of a product are not vulnerable to this perception, nor are those who buy an expensive item. where the price differences are small.


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