Have you ever wondered why all those products on TV all cost $19.95? How about why used car dealers…excuse me, “preowned” car dealers offer $199 down $199 a month?
It’s an often used and very successful marketing concept. The idea is that certain numbers set off alarm bells in a buyers mind and by shaving a penny or two off the price we can avoid these alarm bells. A person will wrinkle his brow and wonder if that fancy kitchen gadget is worth $20, but he will be franticly dialing the phone credit card in hand for the low low price of $19.95. What a bargain.
Believe it or not sales figures seem to support this idea. Shave a few pennies off the round dollar amount and people are more likely to buy from a TV ad, however this doesn’t work in all forms of marketing.
When buying in person people appear to prefer round numbers. For instance. I have a friend who sells knockoff tennis shoes at flea markets. Don’t laugh. He quit his regular job because he makes more in a weekend at the flea market than he did in a 40 hour week.
Anyway he dicovered that the magic price for knockoff tennis shoes at a flea market is $20. Any more and buyers huff and go “I might as well go to the shoe store for these prices.” Any less and they question the quality of the shoes, Look them over again and agian, then walk away without buying.
I won’t make a value judgement about peoples’ behavior. The object is to make sales, not judge your customers right? The simple fact is for every product and service there is a magic price that a customer will readily pay with almost no selling on your part.
I won’t even try to guess why, but for ebooks that price appears to be $7. You have probably by now seen the rash of $7 dollar ebooks everywhere. On marketing web sites and blogs and all over the web. For some unknown reason $5 is too low and 8$ is too high.
Does it really matter why? As marketers we don’t need to question why. We find what sells and stick with it until it doesn’t sell anymore.
If the public will pay $7 without flinching who am I to question them?
Maybe it’s because $5 is not a lot of money these days. So if it cost $5 it must not be any good or it would cost more. But then $10 is double digits. Hold on here $10, I could get two fast food lunches for that.
Okay, I am guessing why, but the point is, $7 is the magic price for an ebook. Atleast for now it is.