Traditionally retailers, high street & online, have been creating their pricing based on a model called “price ending” (aka psychological pricing). In a nutshell, the aim of a price such as £9.99 is to make customers ‘feel’ that the price is lower than it actually is (£9 instead of £10). And marketers the globe across, know this works in many cases.
However, pricing online is changing this practice due to consumer search behaviour. With people posing complex search queries by adding dates, product features, pricing etc, traditional retail pricing practices become less effective for marketing products.
Searchers (consumers) are now typing round numbers when searching for products e.g. “refrigerator £300” or “Ford Monteo £2000”, making psychological pricing irrelevant. There are plenty of examples of commonly priced products which searchers are targeting with rounded pricing.
In conclusion, when determining online pricing remember that the user is a lot more likely to type in ‘£10’ than ‘£9.99’ (with the exception of searching for an offer seen previously elsewhere). Therefore, it is logical to adapt the pricing policy to this modern trend.
Interested in seeing how this concept might apply to your business? Talk with one of our marketing consultants today.
