The Psychology of Pricing

Does it really make a difference to sales if you price something at $9.99 rather than $10?

Certain prices have a psychological impact – for example, most pricing is set at $9.99 rather than $10, or $997 rather than $1000. This is now common practice and attracts interest from buyers which wouldn’t exist if the ‘higher’ price was quoted. But there’s more to it than that.

You may think its mumbo jumbo, but there seems to be an attraction or repellence factor around certain numbers. We don’t know why but as this is the case, why not take advantage of it in your pricing?

In Marlene Jensen’s ‘Pricing Psychology Report’ (http://www.pricingpsychology.com/) she speaks of “magic” numbers and “poison” numbers.

Examples of “magic” numbers:

• A price with a 7 in it, considered to be a “lucky number”, has been proven by all sorts of trials to bring in more sales. Jensen says as much as 10%. For example $97 outsells $99.
• But if you are selling to markets in the East as in China and Japan, 8 at the end of a price is considered lucky as the Chinese character for 8 is the symbol for ‘infinite good fortune’. But only an 8 at the end of the price will work –choose $78 and not $80 
• When you put up your price notice, don’t include the cents if the price is in round numbers. If you sell something for $37, don’t list it at $37.00 as that looks bigger to our eyes and we think it’s more expensive. On the other hand if you are discounting by $37, then write ‘$37.00′ up big and bold as customers will think they are getting a better bargain!

Examples of “poison” numbers:

• A price containing a number 3 is said to be a turn off to customers. Jensen gives this astonishing example of price testing she’s conducted:
  Prices tested: $295, $395, $495
  Results:
  - 73 orders @ $295
  - 26 orders @ $395
  - 51 orders @ $495
• The number 13 is generally seen as an ‘unlucky’ number in the West though price testing hasn’t been done to prove this.

Make some tests of your own to convince yourself that this is true.

Show your ‘kiwiness’ and grab your .kiwi.nz domain name

InternetNZ has announced the availability of a new domain name extension in the .nz domain space, .kiwi.nz. This provides you with greater choices and new opportunities, especially for New Zealand businesses, personal websites, email and online marketing.

This coincides with the announcement that the total number of .nz registrations has gone past 500,000.

The 500,000 milestone comes nearly ten years after InternetNZ introduced a competitive market for .nz domain name registrations.

Over the past ten years the .nz domain name space has experienced average yearly growth of 38,280, with the upward trajectory showing no signs of slowing. This is partly because people identify strongly with the .nz domain. A recent report from Europe which found that most businesses continue to put their faith in the local country’s domain, favouring these over generic names such as .com.

When registrations for .kiwi.nz opened, the first fifteen minutes saw over 1000 names registered.

Look to motorway signs for clarity

Motorways are about getting from A to B in the quickest - legal - possible time. But have you ever spared a thought for the signs dotted along Britain's roads (and New Zealand roads for that matter)? Britain's road signs look as they do because of Jock Kinneir and Margaret Calvert. The graphic designers standardised the road network, created many of its signs and produced two new typefaces, Transport and Motorway.

In the 1950s, road signs were a mess - a confusing and dangerous hotch potch of different symbols, colours and lettering. But more and more people were acquiring cars.

As the government set about creating a brave new world of motorways, Kinneir and Calvert were given the job of making signs that could be clearly read in a split second.

Calvert, now 75, says they had to start from scratch. "It required completely radical thinking. The information wasn't there in terms of reading distance, clarity and letter spaces. We had to make up the signs and then test them. It was instinctive."

They were tested in an underground car park and in London's Hyde Park, where they were propped up against trees to determine the most effective background colours and reading distances.

One of their biggest decisions, which caused upset among conservative commentators at the time, was to opt for a combination of upper and lower case letters.

"The actual word shape was the most distinctive thing because if you had Birmingham in capitals, from a distance, it's difficult to read but in caps and lower case you have word shape," says Calvert. "That was fundamental."

After the success of their big and bold motorway signs, the pair were commissioned in 1963 to overhaul the rest of Britain's roads. They created new signs and remodelled existing ones, based on the European protocol of triangular signs to warn, circles for commands and rectangles for information.

Internet doomsday gets closer

Hundreds of thousands of computers will simultaneously lose access to the internet on July 9 2012, unless their owners check for a virus that may have remained hidden for several years, the FBI has warned.

The so-called "internet doomsday" will come as the bureau turns off a server system its investigators installed in November, when they broke up an Estonian crime ring that was running a global internet advertising scam.

Since 2007, the six men had been using a "Trojan" virus - named after the mythical horse - to seize control of computers all over the world.

The virus, called "DNS Changer", would redirect the web browsers of victims from sites they wanted to visit to ones controlled by the gang.

Revenue from adverts tied to those sites is estimated to have earned the criminals US$14 million ($17.2 million) in commission.

By late last year, when the FBI and Estonian authorities shut down the racket, the virus had seized control of about half a million computers.

However, had the investigators simply closed down the gang's servers, every computer infected would have been unable to access the internet.

The FBI replaced the gang's servers with a surrogate server system, and set up a free website which allows people to check if they are victims of the virus, and then remove it from their machine.

More information here: https://forms.fbi.gov/check-to-see-if-your-computer-is-using-rogue-DNS

Check your DNS here: http://www.dns-ok.us/

Know the risks of having a .COM website domain name

Impossible. Nuts. Unbelievable. Those are some of the more polite reactions Chief Executive of InternetNZ, Vikram Kumar gets when he tells people that having a .com domain name for their website is sufficient for them to be subject to US jurisdiction - which allows for nasty stuff like the US government seizing their website or extradition to USA to stand trial over there based on allegations alone.

With all the recent controversy surrounding Kim Dotcom, it might pay to know the legal risks if you operate your New Zealand website with a .com domain name. Vikram says "The bottom line is, if you have a .com domain name, or other at-risk domain names like .net, you are subject to US domestic laws and jurisdiction. This allows the US government to seize your website or even seek your extradition to USA to stand trial, based on allegations of breaking their laws. You're also at risk from any mistakes and collateral damage."

Read Vikram Kumar's enlightening article in full at the NBR website and be fully informed of the risks. http://www.nbr.co.nz/article/have-com-web-address-know-legal-risks-ck-113355