Charm Pricing or Prestige Pricing?
There is an enormous material available on the internet about psychological pricing strategies. But, these contradictory strategies are haunting me for some days now.
Charm pricing requires you to value pricing that ends with 0.9,9 or 99, while prestige pricing requires you to round the pricing to 0,10,20 or 100.
How did you figure out your pricing strategy? Is there a way to know this before introducing the product in the market?
You’re overthinking it.
The difference between charging $19 and $20 is not substantial! The cumulative effects of something like charm pricing are relevant for the McDonalds’ of the world, who are moving thousands of items a day and need to get every last drop of conversion they can.
It’s better to be focused on the most significant digits in your pricing plan (should I be charging this customer $100 or $400) before worrying about the least. Set up your infrastructure (and your psychology) to allow for changing prices often — that’s more important than landing on the perfect price point immediately, because, well, nobody lands on the perfect price point on their first go.
Ah, that made more sense.
What I understood is -
The pricing factor weighs in when there is a significant user base. During the infancy stage, there is no harm in trying out different pricing strategies.