The Psychology of 9.99, 10 and 1200

People think an item is way cheaper when priced at $9.99 rather than $10.

Photo from Photoxpress

Price tags ending with .99 rule the stores. They are prevalent wherever you shift your view. Ever wonder why retailers do that? And you can expect certain category of products and services with price ending in 0, like $10 or $400. Even the emission of the comma in 1200 is a result of pricing studies.

9.99s

9 has a pricing power. Any item that ends with .99 speaks out “great value”, “sale” and “discount”. Buyers think that it’s the lowest price it could ever have.

People round $9.99 as $9 instead of $10. Researchers call this the left-digit effect. Everybody that has a brain is susceptible to think that way because that’s just how human minds work. And we are more led to round prices on the left digit because we see .99 innumerable times.

William Poundstone on his book Priceless analyzed eight different studies on .99 prices and found that sales increase by 24% on .99 prices compared to the 10s. Kenneth J. Wisniewski from the University of Chicago conducted another study at a local grocery chain:  sales of margarine increased by 65% when price was dropped from 89 cents to 71 cents; but it increased by 222% when dropped to 69 cents!

People buy more when the price ends with 9. That’s why we see a lot of .99s.

10s

A tipped polo from Neiman Marcus is priced at $150, while a Dolce & Gabbana leopard print bag is priced at 3,425.00. Both prices are ending with 0, and both products are high end. An item whose price ends with 0 communicates premium quality.

People get satisfaction on owning an expensive product. People are convinced that prices ending with 0s are upscaled; and prestige brands love it that way. Companies wanted to keep the reputation on their products so not all can buy it and those who can buy it will love buying it.

1200s

How they write it affects how you buy it. The longer the price appears, the more expensive we perceive. This is the reason why restaurants minimize the price on their menu with 29 rather than $29.99.

Commas and cents make the price longer; hence, increasing the magnitude of the price (at least according to our brain). 1200 seemed to appear cheaper than 1,200.00. There are less words in “twelve hundred” than in “one thousand two hundred”, so we think of 1200 as less.

Did .99s lured you?

Sources:
The Psychology Behind The Sweet Spots Of Pricing; Fast Company
Pricing Psychology: 7 Sneaky Retail Tricks; CBSNews
5 Psychological Studies on Pricing That You Absolutely MUST Read; Kiss Metrics
Party Like It’s 19.99: The Psychology of Pricing; Wise Bread
An Easy Way to Make Your Prices Seem Lower; Neuromarketing

Cheap is More Expensive

A good sale saves money – most times this is false.

Photo from Tim Parkinson’s flickr

I shopped at the Mong Kok Street three consecutive nights while I’m in Hong Kong. This street is a long expanse of small retailers selling dropdown imitation products from clothes to cool USBs. Can you imagine buying Lacoste shirts for a quarter of its original price? I’m not a recreational shopper but I couldn’t stop.

I came home with more on my suitcase. I bought “branded” shirts, watches and a pair of shoes for me; another dozen of shirts for my family and bags for my mother and sister (picked randomly and they loved it!). But I regretted buying them all.

I learned something about myself. Heads up mothers, this may give you a heart attack: I don’t like sale items.

I need not any of the items I bought in Hong Kong. I never used the shoes because I realized I hated the dire design. The strap of the watches peeled (turned out they’re made from plastic). After the first few wash, the clothes are indistinguishable from a rag. I depleted my entire budget for that trip because everything’s so cheap it feels like I should take advantage of it.

But cheap price is cheap quality. They don’t last long. They don’t satisfy you with the value you deserve.

After the Mong Kok street experience, I always get myself the topnotch original brands simply because I deserve the best. There may be some delays to my purchases, but that delay adds up to the excitement and happiness of buying the product. I’ve grown to give-up my quest for instant gratification that cheap products give because that gratification will go fast and will become frustration.

Like David Hays says, “Buy it once”. Choose the better quality products with better value. Buy for long term use and lasting gratification.

What cheap product you have to buy twice after the first broke?

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Mention:
Buy It Once: When More Expensive Is Cheaper; Black Star Rising

Privacy, a Commodity

Everybody’s public unless you buy your privacy.

Photo from stock.xchng

I looked for opportunities to sell my phone online. eBay and Craigslist are good options but I did my research to know if there’s another way to sell it faster. After that, the ads in the webpages I visit are by gazelle.com, a website that buys gadgets. This happens to you as well.  Our activities online were tracked and the ads we see are customized according to our interests.

It’s not only online where we are scouted. Go to a store and see yourself in the monitor as you move in the CCTV camera. Travel abroad and they’ll require your photo for the immigration. Apply for jobs, sign up for a service, download anything – almost in everywhere you’ll have records of what you did and where you’ve been.

Researchers from the German Institute for Economic Research and the University of Cambridge investigated whether people will pay more money for privacy. People are willing to give their phone numbers when buying movie tickets as long as they’re paying less.

Carnegie Mellon University researchers countered this study. Their results show that people will pay 60 cents more for a $15 item to protect their privacy.

Products like Evernote, a terrific notes software, will ask you to buy premium just to get rid of Ads. If you’re poor, you wouldn’t pay for premium. You’ll stick with free and get used to the parties tracking your activities for relevant ads posting. If you can afford, you can buy and disappear just like that.

In this time where privacy was becoming a luxury commodity, are you willing to pay for it?

Sources:
What Would You Pay for Privacy?; The New York Times
Study: Shoppers will pay for privacy; CNet

Ironing: Sporty and Nifty at last!

Ironing is not boring at all, just make it extreme.

Burnishing an electronically heated flat pan of iron to make your garments unwrinkled – boring! You don’t just stand there. Hey hit-or-miss idea, why not iron your clothes in a zoo, or between pushups, or while hula hooping, or free falling at 53 m/s like this guy.

Photo from slices-of-life.com

Or underwater. Right after you wash it, all the while defying the science of electricity. Just don’t let it dry up.

Photo from flatrock.org.nz

Or even bring your friends, yeah! Ironing sessions, that’s very masculine.

Photo from teara.govt.nz

Or at your wedding? It’s a long day, don’t judge.

Photo from unst.org

Or make James Franco in 127 Hours look lame.

Photo from strangeandweirdhobbies.com

Or while leading a skiing squad.

Photo from awesomeoff.com

Or on the edge of the world. A peaceful place to iron, everybody needs that.

Photo from oddculture.com

If it hasn’t dawned on you, Extreme Ironing is a sport. Yeah it’s a real thing, google it!

How extreme can you iron your clothes?

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Men and Women Shopping Dissimilarity

Shopping is recreation for women but chore for men.

Photo from photoXpress

That big S-A-L-E sign is the source of men’s torture when shopping with a girl. They wouldn’t miss any store with that sign. It’s like a red hot invitation for them to come in and look for products they don’t initially plan to buy.

A girl who shops for a perfume takes about 15 minutes to sample the different variety of perfumes before deciding on one. That’s only half the battle. The way to the mall’s exit is also another abiding allure to numerous detours and side-seeings for her. While for men, it’ll probably take 6 minutes.

Men and women are really from different planets. And shopping is one activity they do differently. I couldn’t agree more in this statement of Wharton’s:

Women are happy to meander through sprawling clothing and accessory collections or detour through the shoe department. They like to glide up glass escalators past a grand piano, or spray a perfume sample on themselves on their way to, maybe, making a purchase. For men, shopping is a mission. They are out to buy a targeted item and flee the store as quickly as possible.

Their study also reveals that women’s main problem in shopping was “lack of help when needed”, while men’s topmost problem was “difficulty in finding parking close to the store’s entrance”. All men cared about is getting the shopping done as soon as possible to have more time for other activities, and apparently parking space. So internet shopping is a gift for us.

Men and Women Shopping Dissimilarity. Photo from spanishdict.com

What is it about shopping that excites women? I guess I wouldn’t understand it because I’m a guy. It’s the same thing as any girl wouldn’t understand the long hours of men playing Skyrim in PS3 or Xbox 360.

How long do you shop?

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Source:
Men Buy, Women Shop’: The Sexes Have Different Priorities When Walking Down the Aisles; Wharton