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  1. P.F. Bruns

    “It opened it’s 4th restaurant of this kind in Portland…” should read “It opened its 4th restaurant of this kind in Portland…” (Or “…fourth restaurant…” if you’re following AP style.

    1. BDoherty

      P.F. Burns – Shut up, if all you came up after reading this article is a critique, you’re clearly have a high opinion of yourself douche. – Amazing article, gave me a ton of motivation and insight

  2. yachris

    Great post… but in the line, “The band allowed fans to download the album freely and offer, in retribution, any amount of money they would like.”, I *really* don’t think you meant “retribution” :-)

    1. Jules

      “Remuneration” would’ve been a better choice. P.F. Bruns: in the author’s defense, my iPad auto-correct always changed “its” (possessive) to “it’s” (contraction) until I modified the auto-correct settings!

  3. drbillnye

    Great piece, always good to challenge the existing pricing strategy to try and maximize my result. Thoughtful suggestions, thx


  4. Sebastian

    Very nicely summarized – thanks – I’d also suggest Robert Cialdini’s book “Influence” as a great primer and easy read on how to use subliminal and natural responses to sell and market products. (no – I’m not related – I picked it up when I heard that Warren Buffet gives away copies to everyone that comes into his office)

  5. Rick Noel, eBiz ROI, Inc.

    Really thought provoking with some great examples. Relating to my own personal expriences, each of these experiments proves true in my own pricing evaluations and thought process. I especially like the beer on the beach example (on multiple levels:-). The anchor in the real estate pricing example was interesting as well. Thanks for sharing.

  6. Phil O’Doherty

    Very nice. Perception plays such a huge role in pricing. People are always benchmarking and rationalizing the price off against some other expenditure. Unfortunately for me that is usually beer…which isn’t cheap :)

  7. Yohann

    Thanks for sharing your experience. Already knew some and learnt about others. I loved the fact you used concrete examples to demonstrate your points

  8. Yoav Aner

    Great post. Regarding the final recommendation however: what can you do if you really have only one product without an easy way to ‘package’ it differently?

    1. Cliff Gordon

      Package yourself differently. Or whatever they see between themselves and the purchase of the product.

    2. Danil Watson

      Can you expand or cite an example of this Cliff? I am presently in the same boat as Yoav. I have a tablet bag company and we are in the midst of launching our first product. It’s our only product in the next 6 months.

      Thanks ahead of time.

    3. Duncan Elliott

      Depending on the product, you can add extra bonuses or support levels..

      Support ticket, email, telep he support.

      Upgrade to Done For You option.

      What else could you value-add to price differentiate?

  9. Website Sales Lab

    Great article. I really liked it. Thorough and complete. I’ll definitely be referencing this when people start to talk to me about pricing or ‘testing’ their pricing. I’m also going to follow you now :)

  10. Janelle Zhao

    That was very informative. Way to go!

  11. Matt Hixson

    Pricing is something I’m working through right now. This was great.

  12. lisa pluth

    Thanks for the piece. very well researched. I’ll be using it as a reference!

  13. natalie

    I wonder if when you suggested we could download a PDF that you had included a ‘pay what you like’ field, you would have made some $$? After the good feeling of reading this great piece I would have stuck at least a dollar on it. All the good Radiohead fans did, and you clearly spent time researching this and working hard to inform your readers. (Just my $0.02) ;)

  14. Thanks Peep, useful research.

    I always ponder in amazement how people are willing to pay $50 and upwards for an eBook but balk at paying $20 for a physical book.

    So much psychology!

  15. Ruben Parra

    Thanks much for such valuable information, i would add (maybe to the number 4) following also the contrast principle that your expensive package should be first on the list.(of the three)

    best and thanks again!

  16. laurent de 500K

    I don’t believe i read this whole article in english (i’m french), but it was very interesting and make me think about my real estate business. I would be happy to traduce it on my blog “500k”, so if you would be happy to be traduce on a french blog, make me known it. bye and i bookmark your site & tweet this.

  17. Bruce Stewart

    Great value article. The stand outs for me were “Can I split test the price?” and “They changed the experience of buying coffee, so the perception of what people were getting, changed.” it is all in the way of how you package it.

  18. Bill Dett

    Great article. We’ve done a lot of price testing. One comment: Dan Ariely’s “Economist” experiment is bogus. We tried that – on real people vs. his hypothetical – and found the decoy price makes no difference. Even the Economist doesn’t price that way any more.

  19. Rikard

    Great reading! This will be very useful in my everyday work

    Thank you!

  20. Wonderfully written! Wow. So helpful and easily applicable. I really appreciate this. Thank you!

  21. Espree

    This was well thought out and very very useful. Thank you!

  22. Jake Auriel

    So much gold in here. Thank you! Going to test some price strategies to increase my conversions.

  23. George Mihaly

    Great insights from this article. I do freelance videography and notice more and more how the packaging of my service extends to so many elements other than just my video (i.e. my business card, having a business email address, my website, my email signature, the way my invoice is laid out…etc) to create a cohesive impression that makes the price that I ask for seem fair. Thanks for addressing this gray/uncomfortable topic that is essential to my livelihood. Cheers -George

  24. Shane

    Ah this is fantastic! I think the idea of a simple 1-price option resonates with me the most, but we do present more expensive alternatives first. We also do our best to legitimately offer far greater value than the price, which is an option with digital products.

    Is 9 still the go-to number? I’ve heard that it’s 7 now, and soon to be 6.

  25. Jeremy

    Some great tips, I’ve been struggling finding my right price points. I think I’m going to focus on the anchoring, your tip to offer a high price on ballpark estimates was gold!

  26. Ayodeji Babaniyi

    Great Article! One pricing strategy I tried on craigslist that worked is using the perception of higher quality based on price. I attempted to sell a used queen mattress I bought originally (brand new) for $120. I did not use the mattress much, in fact it was still in its wraps when I decided to sell it. The original price I set, which I thought was reasonable was $80. I got very few leads, and was unable to close any of the leads. Then I changed the price to $200 just to test the perception of higher quality based on price. I got 5x more leads (mostly women for some odd reason) and was able to close for a profit! As discussed, the perception of higher quality based on price actually works. It seems irrational and unethical; however, it works.

  27. Sheila Diamond

    Great article. Thanks for all the research material. We humans are really funny.

  28. Hello Peep,

    Thanks for your great article with so many cool researches.

    I have found few new cool ideas as well.


  29. Pablo Cases

    Nice article with a case study to experiment with. Thanks a lot, it worth it.

  30. Wayne

    This is a great summary. I’ll keep it on hand for future reference.

    The only thing I didn’t see mentioned is the “paradox of choice” factor, whereby the more choices you give a buyer the less likely they are to choose any at all.

    1. Peep Laja Peep Laja

      Thanks Wayne. I’ve covered paradox of choice is several other blog posts, but not here as it’s not directly a pricing issue.

  31. Nirmal

    What a brilliant article! I also noticed the story came to an end just right when I was about to get bored!

  32. Pavel

    Great post. I am going to re-consider my price scheme.

  33. Shelley | The Food Relationship Coach™

    Thanks for the research you put into this! Pricing has been one of those things that has always been mind-boggling for my business. Now I can actually put some science behind my price structure and stop hoping that this $xx.xx works!

  34. Nicole

    This is the best pricing article I have come across. Thank you!

  35. Fantastic article! Always struggling to figure our best price for product. Definitely going to test a few of these examples. Thanks!!

  36. Paris Ciel

    BLew my mind away! Definitely own of the best pricing article so far.
    Does anyone here has any experience in using service like to A/B split test their pricing?

  37. kalpesh

    This was a great article, good insight, and interesting things to think about for perceived value, price anchoring, and the mysticism of the number 9…

  38. Jonathan Jaeger

    Love Predictably Irrational! Great book and a must-read. I always like the wine menu technique of anchoring with a high-priced item even if people won’t buy it.

  39. Dennis

    I didnt read all comments but the origin of .99 and .95 price endings was when the merchant wanted to force cashiers to give change instead of slipping the note into their pocket. (General rule of retail is staff are not allowed to carry money on them so cant give change out of their pocket).

    Customers will spend $100 and wait for the 5c change. We are funny that way…

    Great article

  40. Chris Dean

    Is there a primary source to a single peer-reviewed scientific journal article anywhere in here? Seems like just a bunch of hypotheses and self-published pseudo-science so far.

    1. Leigh Caldwell

      Chris Dean: most of the experiments in here are indeed based on peer-reviewed papers, but I agree it is best not to take them purely on trust. I looked them all up for the bibliography of my own book (not listed above, but then it did come out after this blog post), The Psychology of Price:

  41. On counter-clock-wise average basket-size increase:

    I am willing to bet this has something to do with more people being right handed than left handed. It is easier to reach with your dominant hand and when you are moving counterclockwise the outside of the supermarket is to your right and there are more products along the wall (to your right) than there are on end-caps and shelves to the left.

  42. Steven Hughes

    Strong article with a ton of pricing intelligence. I think 7 might have replaced 9. At least online. I see 97, 37, and 147 all over the place for product offerings online. Looking for data on this angle.

  43. Dennis of PreSposure

    Glad I came across this. Im coming up with the prices for my services and feel a bit comfy following what the big companies are doing. I always noticed that most stores don’t have numbers like 25. It’ll be 24.99 or 24.97.

    Great read. Thanks for sharing

  44. Brilliant! Thanks so much for all of this critical analysis.

    What are your thoughts on $97 vs $99? And what makes a “website look expensive”?

    Thank you!

  45. This has to be one of the best articles I have read on pricing! Absolutely brilliant. Will implement few of these strategies on our product that we are going to sell next week!!!

  46. Saurabh Hooda

    Thanks for such an awesome article. Really interesting aspects of pricing strategy. When an article force you to think more on the subject then I categorize that as Masterpiece!! This is one of those articles.

  47. Tourist in Chicago City

    Very good info. Lucky me I found your website by accident (stumbleupon).

    I’ve book marked it for later!

  48. Kenneth

    This was a great read. I have had the problem of not knowing what to charge and I end up giving myself away for way to cheap. After reading this I am going to try some of these technics.

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    For an extended time, checking your {internet site|website|web-site|web internet site|web-site|net site} having a rising curiosity. Jots down really interesting, the subject areas that

  50. Arshad

    This post has really made me to comment on it, the sheer value it gives, Peep Laja wish I knew you from the first day I started my own business!! great man! hats off!!!

  51. Deeeter

    Something I experienced in the 3 model scenario is naming the product. Some may find this very interesting. I had a $3000 Model, a $2400 model and a $1800 model and all had the same benefits basically but as price increased the value did as well, so what I did was play with the name of each model…My middle model sold the best by far ($2400) Then I came up with an idea based on learning my customers and realizing they took great pride in being called “Professionals” so I thought I would test my product names based on this. I deal with contractors in the home/business building sector and changed my model names from #1, #2 and #3 to The “Professional Series” ($3000) The “Contractors Series” ($2400) and then the “Homeowners Series” ($1800) We never sold/sell one unit to a homeowner…..we went from our middle option being the best seller by 2x, to the top expensive model being the new top seller….it didnt double but its close and a very big reward! people like to have an ego when they make a purchase and want to be thought of as an elite of some sort. Our sales guys ask from time to time…are you a homeowner? Are you a Professional contractor? This was an amazing breakthrough for us. We are currently launching a new product and get the benefits of launching with this tip.

  52. Hauser

    That just reminds me of Kickstarter reward options.

  53. Kedar

    Great Piece . very informative. consistent smart update to pricing strategy pays.

  54. eemes

    I love this post, this is what i am trying to do and figure out with my social media services. Well pricing is very tricky becz you need to get the best price. I have offered my SEO services between $50 and $100 as low cost one time package, that’s cool na :) But its all about how to sell the best services by attracting customers just as i do!

  55. French guy

    I have learned the hard way to get the right pricing in my business, your article is very informative and help me a lot, thanks.

  56. I liked this article, in fact i was practising it, but it gave me more motivation.
    But here one thing is missing for markets like ours, where we are dependant on retailers for our sale and we don’t have budget to advertise, we do same practice for them but still we don’t get desire results. what other techniques we should use so the retailers(who assume that they know 100%) compel to give us cent percent results.

  57. Guilherme Sousa

    Great article. I really love it. this information is useful so we can have a second and third option. Congrats!

  58. Andreas Linde

    Do you know a good tool to do a/b testing of prices? Because doesn’t it have to communicate with the backend? It sounds complicated but if there is a tool to make it easy I am up for testing it!

  59. Carmen

    Wow! Thanks for the articles. Great readup and information!

  60. Freaking brilliant article! Thank you!

  61. John Matos

    Great article. The three options tip is very true. If you offer a three package solution…a percentage of people will always go with the premium package.

    You’re losing money if you’re not offering premium packages in your business. Great article Peep.

  62. Julianna

    Really interesting article!

    The beach-beer example reminds me of something I’ve often noticed about myself when considering prices. I used to go garage saling a lot and made a habit of bargaining down prices. Garage sale prices are much, much lower than any other kind of shopping I’ve done–a shirt that would cost $15 in a store would be worth maybe $2 max at a sale. (Most of the time, the sellers just want the junk out of their house and don’t care much about profit as long as they’re getting SOMETHING.) Yes, most garage sale items are used, but sometimes people sell new-in-box or as-good-as-new items. My price standards are way different. An item that I’d be willing to pay $30 at a store being sold for $5 at a garage sale seems super expensive to me–I’d bargain it down or pass it up unless I needed it urgently.

    The three-beer example makes me think of something else I’ve read–it was years ago so I’m afraid I have no clue on the source. It goes like this: A jam seller on the side of the road offers one flavour of jam and makes good profits. A similar jam seller who offers a lot of flavours makes less money. Why? Because for one flavour, the customer has only one choice to make: Buy or don’t buy. For many flavours, the customer has two choices: Buy or don’t buy; buy flavour a, flavour b, etc., or don’t buy (because none of the flavours look good). That gives the customer two chances to choose “don’t buy.” So it’s funny to see a similar example being used with the opposite message.

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Pricing Experiments You Might Not Know, But Can Learn From