Meh Experiment Variables: Pricing
14We launched Meh as an Mediocre Laboratories experiment to test out if a classic daily deal site that sold only one item a day was viable (again). And we’re working on additional experiments that will test out other who-knows-if-it’ll-work e-commerce things.
But while the daily deal aspect is the main variable at Meh, it’s not the only one. We’re trying out all sorts of stuff around here, and will be tweaking the variables along the way. We launched without order confirmation emails, but changed our minds along the way and put in a button to make them optional. (Even with that, apparently 35% of you who request one never even open the damn email.)
Pricing is a pretty risky thing for us to play around with, but we’re testing something here, too. No, we’re not a/b testing charging different amounts to different people, that apparently pisses people off.
We ditched the ubiquitous practice of pricing everything 1 cent less than a dollar, putting .99 at the end of everything you ever sell. So today's Microscope is $10, not $9.99. Just in case my opinion here isn't clear:
Really, though, I don’t know - maybe we’re costing ourselves tens of sales by rounding up that penny. Maybe we’re jerks for pocketing that extra cent. But I really really hope that it just turns out that people are not idiots, and pricing things at whole numbers is just good business.
What do you think? Would you be more likely to buy something that cost $9.99 vs $10? Are we idiots for trying this out?
- 42 comments, 89 replies
- Comment
Doesn't matter to me one way or another as a buyer, but it's pretty well established in retail that consumers tend to think of an item priced at say, 9.99 is a better deal than the same thing priced at 10.00. The concept has to do with the buyer generally reading prices from left to right and tending to mostly ignore the cents digits, so they'll think of 9.99 as 9-and-some-change rather than a whole 10 bucks. Not saying it makes a massive amount of sense, but that's the human brain for ya.
I didn't notice it until you brought it up, but I like it. It makes the site cleaner, and now my head doesn't hurt from having to process decimals and nines. Seeing a "10" instead of a "9.99" satisfies me on a deep, primal level.
@darksaber99999 Your username would beg to differ.
My objection to the x.99 prices is that I hate carrying more change than I need to. On one hand, we're moving into a cashless era, so change will be irrelevant. On the other hand, a pack of gum is something like fourteen decimal places of Bitcoin. I kind of abstain, but not until I suggest you hack up a page for some sale that lets users choose between paying X and X-0.01 and see what happens, o great experimenters.
@editorkid And then the government throws a kink in your plan by charging tax...
@editorkid Maybe they should start a 99.meh.com and it's the same deal but -.01$, and see if more people buy from there, based on visit/purchase of course, because the second site will likely be less known.
@TehMaliron Ooooh oooooh a Dollar store - well almost a dollar store. We have an 88 cent store around here which is full of genuine, made in china crap
@tightwad I don't think that's a kink, but it's irrelevant anyway. The assumption is that people are responding to the .99 price.
I pay more attention to the cents because of Costco's pricing scheme.
The only thing that bothers me more than it should is gas prices. It's always 3.799 (which is more expensive than 3.79, by almost 1 penny, if you weren't sure).
I prefer that you take the penny, give us round numbers, don't treat us like idiots and generally be transparent (vs. deceptive and manipulative). It's the sort of thing that, IMO, seems consistent with the whole model and general tone of the place (honest even if it hurts). As, in, "Hey there, customer, we're going to be honest, but it'll cost you a penny. You got a problem with that? Well fuck you."
But seriously. And thank you. It's part of why I come here. And, yes, I noticed.
I meant all of that, but as I thanked you, I couldn't help thinking of this:
@joelmw Hey thanks, it's good to know that the things that are important to us are being well received. Being able to be as transparent as I can be here was a top priority for me and one of the reasons I was so excited to work here. It's incredibly rewarding and nice to not have to bullshit people.
@JonT The obvious lack of bullshit is why I like Meh. Honest people saying honest things while selling "one person's junk - another's treasure".
Here's a surprising point that isn't as easy to explain though: for whatever reason people seem to like X.99 more than X.89 or X.79 even though those are obviously less. According to this article a liquor store in the 60s that sold wine at various prices (79 cents, 89 cents, 99 cents and $1.49) changed all the prices to 99 cents and sales improved, even on the ones that were now 25% more expensive. The article doesn't explain that, but it might be because the equality of the pricing sceme simplified the choice for buyers.
I'd like to claim that I'm way too smart for this kind of manipulation, but I'm not. IKEA prices most stuff with even dollars but their sale prices end in 99 cents, and I've noted I do tend to pay a lot more attention to those items even if it's stuff I don't really need.
Look at high-end retailers; their prices are in whole dollar amounts. So that makes Meh the classiest discount retailer.
i just thought you were trying to save room on your hard drives like the people that coded for a 2 digit year instead of 4 digits. i would be happy to send you an extra hard drive. i think the one under my monitor stores at least 200MB!!!!
@carl669 it would be nice to stop having to run cassette backups every day
@harrison don't be hatin on cassette backups. my company still uses them.
Yes, I noticed and I like it. It bothers me more than it should to have that .99 or as in gas that .999. I always round up when pricing items. I also add in the shipping if it is not free. Shipping is part of the total cost to me so I lump it in the total price when making a purchasing decision. Free with $$$ shipping is not free and is the same to me as $$$ with free shipping. Continue on...
Are you spying on my emails, again??
@speediedelivery don't allow HTML content and they won't be able to track you
@medz I just replaced my tin hat. Will that work?
@speediedelivery worth a shot. You might try making a tin hat for your phone or computer that you're checking your email on too. Just to be safe.
I don't open sales receipt emails unless I have a problem with a sale. I store them in a folder till I get the item and find it satisfactory, then I delete them, usually unread. So even the people who aren't reading the emails may still be using them to track purchases.
@moondrake I do the same thing. Helps with tracking online purchases .
@moondrake As someone that has a weird thing about unread emails/notifications in general I could never do this.
MAKE THE RED CIRCLES GO AWAY.
This is giving me anxiety just looking at it:
@JonT I used to have the same problem. Now I have badges turned off for everything except what I know I can manage. That may be something like putting tape over the dashboard warning light (which I've actually been contemplating as well, but that's another story), but it works for me. If any app (or even app group) has a badge in double, triple or quadruple digits or that takes more than 15 seconds to clear, someone's doing something wrong.
@joelmw For the dash, sometimes a small drill bit works.
@JonT The red circles taunt me until I chase them out. Drives me nuts that a missed call has to be redialed or deleted. What if I want to save the number but not call it?
@speediedelivery I don't have to redial or delete to make the red circle go away for a missed call. I just have to visit the Recents tab in the phone app and the red circle goes away. Are you running iOS, Android, or Other?
@SSteve iOS. I have not been using it very long, though. Maybe I am missing something. I am a recent android switch. No issues with android.
@speediedelivery It should work. Maybe you have to move from the recents tab to another tab.
@SSteve I will try that next time. I am still exploring and finding where stuff is hidden.
@moondrake Same here, emails get shuffled to the Online Purchases folder, where they stay until the order is received. If all is good, they go into complete, or deleted; depending on the retailer.
@speediedelivery or a sharpie.
(Even with that, apparently 35% of you who request one never even open the damn email.)
How do you know if I opened the email? I have the gMail client not open up images in the email unless I ask for it, and I very rarely ask.
@SIMBM It may be totally inaccurate, no real idea how they measure that these days.
$9.88 looks way cheaper that $9.99. Wal Mart figured that out. But I am not convinced that the brain sees $10 as more expensive. Sure, we read left to right, but subconsciously, a 1 and a 0 are a lot smaller than three 9's. Personally, I like whole numbers and would buy something that cost a cheap 10 bucks rather than something that costs a whopping $9.99. It's more simple. Simple = easy. I like things that are easy to buy.
@phatmass I was thinking pretty much the same thing. I see "9.99" and I think "That's a lot of nines" but I see "10" and I think "one and zero, those are tiny numbers and there's only two of them." And it is definitely more satisfying to me to see clean, simple, whole numbers. I think it feels less like spending money without the change on the end.
I like to think I'm smarter than the average consumer, but I suspect that I'm just as susceptible to these sales strategies as most people. I DO appreciate your unique strategy of recognizing your customers are people and not just biological wallets.
Although I guess that "K" next to my name means I gave a hundred-millionaire money so he'd start a website where I could give him more money. So... meh.
at least the whole numbers feel ...... Honest. went to a store call the 99 cent store (it's reall thing I swear) and their tags all say 0.99 bu when you check out it's really 0.999 sooooooooo it's really $1.00. thank you Meh
@dave OMG you just totally ruined that other experiment of trying to force the world to eliminate the hyphen in ecommerce by never using it here.
@snapster D'oh! Uh, let's call this an A/B test. Somehow.
@dave let's assume we won people over for a few milliseconds and now we are switching them back for fun.
Haha look at all those idiots who thought it didn't have a hyphen for a second!
@snapster @dave Psssst... y'all have a hyphen you need to have disappear, I'm your man.
@JonT Aw, I scrolled up thinking it'd already be gone.
Maybe I’m just negative about things but I’ve always read $9.99 as $10. It was brought up by @speediedelivery that shipping is another factor in the equation. With the VMP I look at my $5 across everything I buy in a 30 day period. VMP doesn’t encourage me to buy something I normally won’t but it definitely removes the online barrier of shipping. Sales tax is another thing I hold against a product; it may not be going to the retailer or manufacture but it’s part of my total cost.
@Ryaneil Yep, tax gets added in. It comes out of my pocket when I make a purchase. Not here, yet, I am not in TX but anywhere it does come out.
I feel a personal connection with a low cost that excludes cents in the price.
@TheAlmighty1 Honestly, a lot of our goal here is to talk to you all like we'd tell our friends about a deal. I think you're right that this rounding keeps that feeling going.
The only time I liked the 9.99 instead of 10 is when I told my husband about it - it was only $9 and something. All he hears is the $9.
The extra penny doesn't make any difference to me, but I do find myself calling something 9.99 "9 dollars" instead of 10. Even though I understand they're practically the same, I still say nine because it starts with a 9.
@medz I do the opposite. When I see "$9.99" I think "ten bucks".
@medz I think it depends on the number. Does $48.99 read as $48 or "50 bucks"?
@walarney Since I read left-to-right, I'd probably say 48. Again, I know in my head it's closer to 49, but I'm too lazy to read the whole price then speak something different from what I'm seeing.
My brain must be susceptible to devious pricing practices because $9.99 does in fact sound more appealing than $10 :(
Maybe an even more fun experiment would be... you know how some people are convinced VMP membership is somehow a scam? Make regular shipping $5 and VMP membership $4.99.
@editorkid That is an excellent idea. Both because I think it will work and also because I think it's funny as hell.
@editorkid Yes! You should definitely try this, and be deliberately vague about the price discrepancy.
@editorkid And it would be the only thing on the site that ends in ".99". Loving it more by the second.
@editorkid this is hilarious. unfortunately I imagine the tone (to the non-insider) would be how we were trying to lure people in unscrupulously due to the reoccurring billing.
@snapster I think the real test would be whether or not you got more vmp memberships with a price of $5.99. Would the smart ones question it because it's really $6, or would it still just be five and change?
@snapster Easy reply: "It's as easy as it's ever been to cancel VMP billing in advance. You can cancel a minute after you order. You'll still have VMP for a full month, and when that period ends, you won't be billed until you sign up for it again at our new low price."
@snapster Or here's an additional sub-experiment: On the order confirmation page under the e-mail request and the other link, add, "Cancel MVP now so I'll have it for the month but won't be automatically billed later." That way you've put the option right in front of them from the first moment.
@editorkid That'd be good, but we have some ideas for future VMP extras that make me not want to suggest that as an official option.
@snapster Now I'm worried, because when I ordered last night and added the VMP, I canceled a minute after I ordered...
I love the whole numbers. Even though I round up in my head anyway, the whole numbers look more like a transaction between people and not between a business and a person. When I got a new digital recorder and sold my previous one to a friend I charged him $150, not $149.99.
Is countdown pricing legal? For example, Speaker dock starts at $20. A couple hours later it goes down to $19. Then $18, etc. Then, right before it hits $17, bam, it sells out. You should have bought at $18 sucka!!!
@phatmass Shhh. That would drive me crazy. (Short trip, some would say no trip.)
@phatmass People would storm their office with torches and pitchforks. I know I definitely would stay away. That would be too much pressure. Like waiting for an eBay auction to get down to the last five seconds to make a bid. Yuck.
@phatmass Yes, it is. There are also a few sites that do this.
@SSteve Yeah, and if Mediocre is gonna do eBay, it should be with way less of that shit.
@phatmass old original dot-com boom type of model. I dislike it because everyone ends up feeling crummy except the last few folks. Not a great way to run a business.
Shut up and keep my penny.
@Thumperchick Is that a Fryctal?
@Thumperchick As an Imgurian, I'm pleased to see this here. Recently created (3 days ago), so I have to assume that you, or someone close to you, is an Imgurian as well.
After reviewing the Favorites of "thumperchick" on Imgur... I think my suspicions are confirmed.
@Talidan
I really am just oblivious to the subliminal mind games. I guess when I see 9.99 my mind automatically rounds up to 10. I'm a little OCD so whole numbers sit better with me. I'm the person who has to adjust the volume on the TV in 2s. You will never find the volume on any device in my house on a negative number.
@jimmyd103 -I'm all about odd numbers. TV sound, microwave settings, etc. Still though, I round prices up to the next dollar.
@jimmyd103 I also adjust my TV in 2s. It's much more satisfying having even volume.
@jimmyd103 I always use the negative numbers for volume. How else would one have it? Zero is unity gain!
@SSteve I guess I also have a difficult time putting together a logical statement. negative numbers..... how about odd numbers
@jimmyd103 Ah, a Freudian slip because you think so negatively about odd numbers.
@SSteve I thought a Freudian slip was when you say one thing but you mean a mother.
@SSteve Freudian or not I'm not a fan.
@dave How would you know that people are not opening the emails confirming their purchase? Seems to me that the point is to have it in case something goes wrong… plus if your email shows you the beginning of the email you don't need to open it anyway to see what it is...
@Kidsandliz They've recruited our pets
@bluedyn Yeah that would be my cat… and two more on the keyboard… then they also mark the side of the laptop… all the while trying to sit on my arms and hands while I am trying to type. Are you sure there isn't a cat dirt box in that PC?
@Kidsandliz Aha! They're studying how to use your devices when you're not looking. I usually get "help" when trying to use my laptop. The trick is not to tell them your password.
@Kidsandliz Most emails contain a tracking image. When the image loads, which is unique to the email, it registers as loaded. This is why even opening a spam email, even if you click no links, can cause you to get more spam. http://kb.mailchimp.com/reports/about-open-tracking
@Collin1000 So clicking on show image is what then blows it for one… thanks. OK Meh now that we are armed with knowledge guess I won't click on any more messages from you LOL (hey why make it easy for you if this is cat and mouse?)
I dunno about deal hunters like many of us here, as I am sure most of us are, but through selling my own wares at swap meets and similar, I have found that the average consumer is an idiot.
I really do not understand it. People WANT to pay more. Ending in ".99", people are more willing to pay.
I frequently sell used watches, in good condition, battery running, etc, and jewelry, among other things. Nicer watches at $10, meh ones at $5. I felt like I was ripping people off because I get most of them for free, but people bought them up. Sometimes the $10 ones three at a time. Would usually make ~$150 a day on watches alone.
Dropped the prices down this season. $5 for the nicer ones, $3 for the meh ones. Sales slowed like crazy. Ended up making ~$30 a day on watches. Bumped back up last week, sales jumped again.
I just don't understand it myself. I go crazy for great value, and Meh frequently drives me nuts. I want to price things at what I see as reasonable. "You get what you pay for" doesn't really apply as much at swap meets, yet people still come in with that mindset. For whatever reason, people react similarly when prices end in ".99".
Frequenters of Meh might not fall for that sort of thing, though. I don't.
@Talidan ANd at least on meh we are not handicapped by touching the item which makes people more likely to buy it. Of course there is anchoring which meh tries to do/does so that in comparison crap looks cheap
@Talidan Yes, it's crazy but true. A friend tried selling a couch on craigslist. She priced it at $200, (she just wanted to get rid of it) and got no legit responses. About a month or so later she reposted it for $700 and sold it the next day.
@Talidan Sadly, I'm one of those idiots.
@bluedog It is worth more and better if you pay more, right? This concept works with cars, too. No haggle, $500 or sell for $1500, $1500 will sell first if you haggle down a couple hundred.
@Talidan sadly this is the precise reason why we have to stoop so low as to have msrp/list price. it cuts down on people being informed by only our price as to quality.
@snapster It confuses me greatly, especially when MSRP is no indication of quality, or even cost of manufacturing (or anything else involved from concept to production). It also makes things difficult for an honest guy like me who wants to give people the best value I can when selling. People, man... I'll just keep safe in my haven of the internet.
@Talidan it's laughable, but it's a datapoint I like to scan over and incorporate into my interpretation of the deal. I need to actually make a full thread regarding our effort to set up a foundation for more thorough vetting in the forum.
@snapster Price/quality issue.. but putting MSRP also serves as an anchor which makes the deal look better and, it seems to me, would make people more likely to buy. Also the default "quality" shortcut (amazon) helps with determination of quality. There are a couple of things I didn't buy that I needed because on amazon the flaws mentioned were ones that mattered to me and/or the over all number of stars was low.
@Kidsandliz I do believe you have the "hesitate and use the forums" trick figured out to cut down on consumption.
@snapster a budget also helps on the cut down on consumption...
Everyone says he/she prefers whole numbers. Everyone thinks it's easier for the little brains not having to add that pesky one cent.
The question is, are people actually more likely to buy, and, are they actually buying more with the whole numbers?
The "$9" before the little decimal dot primes our primal brains. Even if that one cent doesn't matter to most people, and even when we rationally know it, that "$9" tend to interferes with how our brains work and we don't even notice it.
At least, that's what Dan Ariely and Robert B. Cialdini's books say.
I was under the impression that sometimes the .99 or .98 or whatever is after that decimal is sometimes an inventory management tool.
For example, at a recent sale "coupons not good on items ending in .98"
Or when things are marked down at a certain time they end in one number and at a different time, a slightly different number as a way to track.
What say you retail peeps ?
@ceagee I know that is the case at Sams Club, Costco and Wallyworld
All I know is when I see $9.99, I see $10.00. When my wife sees $9.99 she reports it back to me as $9.00. As, in, "I got such a deal, it was only $9.00!" Do you really want her to pay $10.00?
@TimWalter I do round-down when telling my wife about impulse purchases...
why don't you try: $15 (shipping included) See where that goes. Go Big or Go Home.
I'm a fan of the round numbers, but @Thumperchick's comment somehow made me think of this. Sometimes that one Penny is the only thing you want.
$9.99 pricing is also to blame for that insanely earwormy circa-1990 commercial with the melody of "Carol of the Bells" sung as "nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine, nine ninety-nine" until you'll just fucking STRANGLE SOMEBODY IF YOU HAVE TO HEAR IT ONE MORE TIME
I don't remember who it was for, and I can't find it on YouTube. But if you ever saw it, you know. You know.
@JasonToon Based on your comment, I would appreciate it if anyone who happens to track it down does NOT post it here.
@DaveInSoCal And if anyone does, we have our October goat.
@editorkid or a past goat:
@editorkid I've spent time looking for it, not for goat honors, just to win. Many commercials rip off this tune, but I can't find the 9.99 one.
@Mediocritique
I was a fan of rounded-dollar pricing when JCPenny experimented with it, but since that experiement also included the elimination of weekly sales and alienated their core customers as well as directly leading to the termination of their CEO perhaps my opinion isn't shared by the masses.
If this doesn't work out I suggest following what gas stations do by ending all of your pricing with 9/10ths of a cent. Seems like a solid alternative.
@Mediocritique JCP failed to realize that you should only make one dramatic change at a time. Rounded prices. What happens to sales? No change? Okay. Weekly sales. People mad? Undo that, keep rounded prices. Instead they made a ton of changes and had to scrap them all with their tail between their legs like new coke.
I am an avid shopper. I shop at the DOLLAR Tree, DOLLAR General, and Family DOLLAR. Note the trend here. The $.99 thing has bugged me all my damn adult life. And when I buy something for $9.99 and tell someone about it, guess what price I tell them; $10 or more like, 10 bucks. On the plus side, a $10 microscope sounds like a much better microscope than a $9.99 one.
I admit that I sometimes fall for the .99 trick. Later when I am thinking more clearly, I regret it. So in an A/B test, I would be slightly more likely to pick the .99, but I would hate myself for falling for it when I realized what had happened.
The business school graduates at Amazon have made hundreds of tiny and not so tiny changes to Woot. Each change in isolation might not have driven away many customers, but the combination sure drove us away.
If meh priced things 1 cent less, I'd be $0.20 richer right now. Meh is doing the round-up concept from Office Space and hoping that extra cent times a few million orders will lead to early retirement.
@medz wasn't there some movie about some guy who worked for a company and he figured out where the half cents went and did some accounting to take advantage of the missing half cents. Richard Pryor ? Anyone remember this plot ? What movie ?
@ceagee: That's superman III, the one where superman turns bad. Now I'll have to find a way to watch it again, I haven't seen it this century.
@belowi Thank you. Now I can sleep.
In Canada, the penny has been removed from circulation. For electronic transactions (debit/credit), the amounts are still calculated to the penny.
But for all cash transactions, the practice is to round to the nearest nickel (1,2,8&9 round to 0; 3,4,6&7 round to 5). So for the average Joe (or Josephine) paying cash, $9.99 really is $10.
Of course $10CAD is something like 17¢ US...
@curtise Death to pennies!
An interesting note when an item goes on sale. I used to sell a $49.99 product on sale for $29.99. It looks like it's more than half price when in reality it's only 40% off. It is easier to see the math when you see them as $50 and $30 but this fools a lot of people because of the 1 cent difference.
If you take an item that is usually $6.99 and put it on sale for $3.99, people see the $6 and the $3 and just assume it's 50% off. Again, that's really only a 43% discounted.
Just bought a KFC $5 Fill-up. I totally would NOT have bought a KFC $4.99 Fill-up.
http://www.kfc.com/fillups/
@phatmass Now I want chicken. I'd blame you, but I'm certain it's @studerc's fault.