Friday, November 2, 2012

The power of 9

A lot of studies have been done on the power of using 9's in pricing and the effect it has on our willingness to purchase a product.  All of these studies show that when you put a 9 in a price, people are more likely to purchase the product than when no 9's are used.

You've probably heard about and seen the use of 9 in pricing.  Almost everything you buy has a 9 in the price.  The power of 9 is intriguing, but none of these studies explain why 9's work.  The reason 9's work is a combination of association and anchoring.  

Association
Association is when 2 or more things naturally go together or are part of a sequence.  When you think of one, the other naturally comes to mind.  Think: "ketchup & mustard", "chicken & waffles", "A,B,C", "8,9,10".  When you use a 9 in a price, regardless of location, the following round number is closely associated with the number:  39 & 40, 99 & 100, 495 & 500.

Price Anchoring
Price anchoring is when you compare your price to either a higher or lower one.  The anchor price, the one that's not yours, affects your opinion of your price.  $1,300 seems like a large number, but not when compared to $48,000.  Adversely $8 doesn't seem like a lot until you compare it to $2.

When you think of $39, $40 is the logical association.  After you think of $40, $40 becomes the anchoring price making $39 seem like a good deal.  We often end up over valuing that 1 dollar.

When a price doesn't have a 9 in it, it is missing that trigger to make you think of a slightly higher price and what you associate with the number becomes much more random.

Now that you know why 9's are so powerful in pricing, you can start using them more effectively, but better yet, you can apply the same concepts to other sales material.