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JCPenney conducted a price study in the early 20th century. Based on the study, the department store concluded that when someone saw a price ending in 7, 8 or 9, they felt they had an offer, and the odd number created a sense of urgency to buy. Since then, research has expanded to the conclusion that if you want to be seen as a luxury good, e.g. Here we are, over 100 years later, and the JCPenney study continues to address consumer trends. The odd and even pricing tactic is commonplace in many commercial establishments - retail stores and restaurants - but what about SaaS? Lets look at the pros and cons of odd and even pricing, show some examples, and see if its a good SaaS pricing strategy. What is an odd-even price? Odd pricing is a psychological pricing strategy similar to charm pricing. Refers to the use of a numerical value to influence the customers perception of the value of a product. The purpose of even and odd pricing is to make small price adjustments that increase sales and maximize profit. The odd part of this tactic refers to a price ending in 1,3,5,7,9, while the even part of the price ends in a whole number of decimals, e.g. B. $0.20 or $50. The psychology behind strange prices Strange prices have a psychological effect on consumers. The use of an odd or even number works on the clients psyche. For example, a $20 item labeled $19.99 will be perceived as cheaper because the number still contains tens, not twenties. Even if the difference is only a penny, customers perceive the price as lower than it really is. Strange prices create the illusion that the product is marked with the lowest possible price. Also, because the number is so specific, customers see it as fair. This has the opposite effect when it comes to equal prices. Customers see a number rounded up, like B. $1,500, and see it as a luxury item. Since it is a round number, the product is perceived as a higher quality product. Industries that often use odd and even pricing strategy Youve seen odd and even pricing everywhere, whether you realize it or not. In a moment, I will introduce some typical industries that use this strategy. So the next time you shop or eat out, pay attention to the prices and see if they are even or odd. Retail Almost every retailer has an odd and even pricing strategy. If not throughout the year, then certainly during the promotional period. The front of the store reads All Jeans from $29.99. While this is technically the starting point for the ask price as the number is less than 30, it is seen as a good deal. On the other hand, you can walk into a designer handbag store and there will be absolutely nothing for sale. All prices are even numbers. This was to be expected as it is a luxury product. restaurantJCPenney conducted a pricing study in the early 20th century. In a study, the department store found that when someone saw a price ending in 7, 8 or 9, they felt they were getting a deal, and the odd number created a sense of urgency to buy. Since then, research has expanded to conclude that if you want to be perceived as a luxury good, e.g. 0 or 5. If you want to be perceived as a discount, end your prices with an odd number like 7 or 9. Here we are, over 100 years later, and this JCPenney study still applies to consumer trends. Odd-even pricing tactics are common in many shopping venues—retail and restaurants—but what about SaaS? Lets look at the advantages and disadvantages of odd vs. even prices, lets show examples and see if this is a good SaaS pricing strategy. What is the price of an odd pair? Pricing odd pairs is a psychological pricing strategy similar to price spotting. It refers to the use of a numerical value to influence a customers perception of a products value. The goal of odd and even pricing is to make small price adjustments that increase sales and increase profits. The odd part of this tactic refers to a price ending in 1,3,5,7,9, while the even part refers to a price ending in a decimal integer, for example B. $0.20 or $50 . The Psychology Behind Odd Prices Odd prices have a psychological effect on consumers. Using an odd or even number affects the psyche of the customer. For example, a $20 item marked as $19.99 will be perceived as cheaper because the number is still in tens instead of twenties. Even if the difference is only a penny, customers perceive the price to be lower than it actually is. Odd prices create the illusion that the item is marked at the lowest possible price. Also, because the number is so specific, customers perceive it as fair. When it comes to flat rates, it has the opposite effect. Customers see a number rounded up, eg B. $1500 and perceive it as a luxury item. Because it is a round number, the product is perceived as higher quality. Industries that often use an odd-even pricing strategy. Youve seen odd-pair prices everywhere, whether you know it or not. In a moment I will introduce some of the more common industries that use this strategy. So next time you go shopping or eating out, pay attention to the prices and see if the prices are odd or even. Retail Almost every retailer uses an odd and even pricing strategy. If its not year-round, then definitely during the event period. You can see a sign outside the store that says All jeans start at $29.99. While this is technically the starting point for the sale price, since there are less than 30, its considered a good deal. On the other hand, you can walk into a designer bag store and there will be absolutely nothing for sale. All prices are even numbers. This is to be expected as it is a luxury product. restaurant

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