The price cut that KILLED sales!
Are you losing sales because your prices are too low? Pricing psychology finds consumers often have a poor reaction to low prices.
A few months ago, we decided to test numbers that end a price. We were especially interested in “3,” “7” and “9.” We had a book for cat lovers that we got in a closeout sale for almost nothing, so we decided to use low prices in order to get the maximum number of orders as quickly as possible.
We therefore ran the price test at: $1.93, $1.96 and $1.97.
After running it for 2 months, we were unhappy with how slow sales were. So we decided to speed things up and get more buyers by lowering the prices to $0.93, $0.96 and $0.97.
Guess what happened? Sales dropped to nothing!
Now, of course, that wasn’t a scientifically designed test. There could be some other reason why sales in one week differed from sales in another. Something that had nothing to do with the price. So we ran the test for another week. And another. And another.
Finally, after four weeks with zero sales, we felt comfortable in saying the results ARE due to prices that are too low. We were averaging about 23 orders per week with the $1 higher price. And zero at the lower price.
(And, yes, we did check to make sure the ads were running and the links were working. We even bought a book ourselves and our purchase showed up.)
The moral of the story? Where people can’t easily ascertain the value of an item themselves — even though we showed the book cover and pages from the book and described it thoroughly — consumers will distrust a price that seems too low.