Charm pricing is often called “psychological pricing” — but to put it more simply, it’s when you see a 7 or 9, even a 5, at the end of a price instead of a round number such as $100, it would be $97, $99, $95 and so on. The left digit is one below the “real” price and it is discounted by a few dollars.
WHY? Well, it’s said to make the price appear cheaper than it really is.
It’s seen by many as a manipulative tactic because it makes the offer APPEAR less expensive.
As a business owner and entrepreneur, you might be using charm pricing for your own products and services because it just seems like the thing to do, right? You see it everywhere you go. From online products to grocery stores and clothing brands and not to mention all the yearly sales (EOFY, Boxing Day Sales, Black Friday Sales – I’m looking at you).
It feels like the weight of these industry-wide and industry created problems are on the shoulders of all entrepreneurs, even the little guys.
What does this mean for you and your business? Should you instantly go out and change all of your pricing for your programs, your flagship course and your service offerings to round numbers? For some, it might be an obvious yes but you really need to consider a lot of factors first.
When you make pricing decisions that are beneficial to both you and the customer, it means that your business is going to be more sustainable, it’s going to be more ethical, more effortless and more effective as well.
In this episode of Good Authority, I’m taking on charm pricing (i.e. arguably the most talked about topic in the ethical marketing space) — and you’ll find that I don’t share the same views as a lot of other marketers out there (shock horror, I know).
Good Authority is the podcast that questions authority on social media — and how we as marketers and entrepreneurs use that influence to make money online and build our personal brands. Listen to the full episode via: