Now that almost every ebook store is going with $9.99 it’s worth understanding why it works.
My 2 cents on $9.99
The reasons that $9.99 works as compared to $15-$25 prices –
- Obviously the actual price savings i.e. instead of a $24.96 hardcover or a discounted $14.95 hardcover you get the book for $9.99.
- Customers feel ebooks should be cheaper and a sub-$10 price ‘seems right’.
Why the $9.99 price works much better than $11.99 or even $10 –
- We tend to use shortcuts all the time (to avoid getting overloaded and overwhelmed with information). So $9.99 is read as $9.
This means that a 1 cent difference gets translated as a $1 difference. Studies claim that changing the price from $10 to $9.99 can increases sales by as much as 200%.
- We have purchase buckets i.e. sub $10 = impulse buy, sub $100 = think before buying, over $100 = read reviews before buying, etc.
Pricing below $9.99 pushes purchases into the ‘impulse buy’ bucket for a lot of people.
There’s a very good post on Elia Insider about Psychology of iPhone pricing that speaks about pricing and finding the sweet spot.
An additional thing to keep in mind is - Even when you know about this, it still works.
$9.99 and a lot of Consumer Psychology is Guaranteed to Work
The thing about
- Knocking 1 cent off of prices.
- Having a celebrity endorse a drink.
- Showing a cool guy as the Apple Mac and a not-cool guy as the PC.
Is that its really, really hard to avoid the impact.
That’s why Apple’s lawyers called up Microsoft to complain about the Laptop Hunter Ads and forced a change –
In the original version of the ad, Lauren, who wants to spend a maximum of $1,700 on her computing dreams, offered this competing statement: “This Mac is $2,000, and that’s before adding anything.”
Her mom, Sue, asks her why she would pay twice the price. To which Lauren gives her the steely look of a future prosecutor and says: “I wouldn’t.”
This loving familial exchange has now been edited out. The old version has been removed from YouTube and replaced with a new version, in which Lauren merely says: “It seems like you’re paying a lot for the brand.”
Apple knows that even people who believe Apple is a quality product will have the mother-daughter pair’s conclusion that Apple is not worth the price lodged in their heads.
ShortCovers hops on $9.99 bandwagon
Shortcovers is the latest ebook retailer to reduce prices of bestsellers to $9.99.
They blogged that –
- They are in the process of adding 200 additional publishers.
- All bestsellers will be sold at $9.99 –
How does $9.99 sound? It has a good ring to it, doesn’t it? We thought so too, and that’s one of many reasons that all New York Timesbestsellers (www.shortcovers.com/NYTBestsellers) are now available on Shortcovers for less than ten bucks ($11.99 in Canada)!
Well, $9.99 has more than just a good ring to it – it’s psychologically guaranteed to work better.
Obviously every single eReader company is waking up to this as they’re pricing their ebooks at $9.99 and their ereaders at $199 and $299.