Is $7 The New $9.99
Awhile back there was a kerfluffle over J.C. Penney dropping the cents and rounding off to the dollar.
There's been confusion over who created the .x9 pricing model.
J.C.Penney is widely credited with it however it pre-dated him.
Here's the real scoop.
Did J.C. Penney invent .x9 pricing and why?
Nope...goes back way before that. Back in the early 19th Century newspapers cost 5 or 6 cents.
Benjamin Day of the New York Sun started selling his papers for a penny, making his money on advertising instead of the price of the paper itself.
He persuaded his advertisers to set their prices at the .x9 so that their customers would always get pennies back in change...which they would use to buy his "Penny Press" newspapers...which increased circulation...which got more customers to see the advertiser’s ads...which induced the advertisers to buy more ads...etc.
I'm not sure if he presented this way, but a great marketing idea would have been to present the papers as free since the penny off was used to buy the paper. In fact you could say the merchant bought the paper.
One of the master strokes of early American marketing.
So what does this have to do with $7 vs $9.99?
Well for one thing, with advent of Credit Cards, Debit Cards, PayPal and such you don't actually get the penny to put in your pocket so there must be a psychological component to it.
So conventional belief if follows that if saving a penny or a nickel is good then saving $1 or $3 is even better, plus you are priced below all the people that aren't hip to the new pricing.
If you're selling widgets this is very important. If there are two gas stations on the same corner and one is a nickel cheaper you'll probably gas up there.
Here's your take away. That's commodity pricing and Amazon, Wallmart & the rest have you stomped.
If you're selling consulting, coaching or an info product like it's a widget then you have made it into a commodity and the sale goes to the cheapest price.
The object here is to help you create a wealthy lifestyle, not create a job so you can employ yourself at basically an hourly wage.
You don't want to be spending your time figuring how cheap to sell your offering.
If you can make something once and sell it over and over again for $7, what's wrong with that?
Nothing really, if it's used as a migration strategy (part of an upsell strategy), however as an end game you will need to attract massive traffic, build an enormous list and convert like crazy in order to make a great income.
There are exceptions, however odds are that usually you will work yourself silly trying make it that way.
I go into this in more detail in my training sessions, however the object here is that the best way is to create relevant value and communicate it in a way that creates a powerful desire in your prospect for your offering.
Then they don't price shop you because they have to have it.