The price of your product or service is one of the most important aspects of advertising, but what’s the best price to choose? Do you choose a rounded, whole number, such as \$25.00, or maybe \$24.99? While these two numbers only have a difference of one cent, their impact and meaning are much greater.

# Prices Ending in .99

Choosing a value of .99 or even .95 signifies that you’re selling the product at a low price, leading customers to believe they’ve snatched a bargain. Furthermore, customers generally pay more attention to the figures on the left-hand side of the decimal, rather than the right-hand side. So, if they’re buying a product for \$19.99, when recalling how much they spent on the product they will remember that it was only \$19. Alternatively, if the product is priced at \$20.00, the customer will remember the “\$20” portion and recall purchasing it for \$20.

# Prices Ending in .00

Retailers use prices ending in .00 to convey that they are selling a higher-quality product. Customers tend to see products priced this way as a reflection of the seller, and not just the quality of the product; products with prices ending in .00 are generally higher-quality brands, such as designer clothing. So if you have a great brand or quality product, and want to convey this to your customers, choosing a whole figure is the best way to go.

# Prices Ending in Anything Else

Products that have prices ending in an exact amount, such as \$13.47, lead customers to believe that the seller has taken into consideration the cost of the item and determined that this is price fair to both themselves and the buyer. Prices that work best in this model are ones that do not include a .9 or a .0.

A study conducted by Kenneth Wisniewski, from the University of Chicago, found that when a grocery store reduced the price of margarine from 89 cents to 71 cents, sales increased by 65%. While that may be an impressive increase, reducing the price of margarine by a further 2 cents, so the price was \$0.69, increased the sales by over 220%!

# What Does This Mean For You?

While you may have set the price of the product you’re trying to sell based on your competitor’s price, the price of manufacturing the product, or the wholesale price, ensure you don’t just set a price that you think is right. Run some tests with the product at similar, but different, prices. If you’re trying to sell a product through our native dsp and your landing page has a price of \$39.99, run another campaign with an identical landing page and set the price to \$37.67 to see how the price affects your conversion ratio.