How Much Is A Penny Worth In Business? Ctd

Screen shot 2013-01-06 at 5.14.30 PM TP2

A handful of readers differ from the previous ones who protested the .99 pricing:

I'll tell you right now, it works for me.  And I like it. Even at the dollar level: I feel better paying $199 for something than I do $200. I'm not tricked into thinking I'm somehow paying less than I am, but at some emotional level I mind parting with the money less when it's presented to me in that way. So perhaps I *am* being tricked, but I like it.


I, for one, think the $19.99 pricing was sheer genius. I mean, look at all of the folks who have paid more for a Dish subscription. That kind of pricing just begs someone to throw in a bit more. I paid $25. (I think that's what I gave Obama – multiple times.)


To all those who want to pay $20 rather than $19.99:

Shortly before my mother died in 2006 at the age of 83, I witnessed her arguing with a checkout person about two pennies' difference in the price of a single item. I remember becoming somewhat embarrassed for holding up the rather long line. In the end, my mother prevailed. On reflection now, isn’t that how the Depression-era kids built a strong country? And we boomers are squandering the whole thing, penny by penny. I think you should stick with the 99 cents meme.


You'll notice that most really high end restaurants are priced with round dollars (in fact, if they want to look even more premium and their menu designer is worth his salt, they'll drop the .00 ending altogether), while value restaurants like diners are more likely to use the .99. This concept applies across most industries. So I guess you gotta choose how you want people to perceive your product. Is your product a bang for your buck? Or are you a premium brand?

One more:

For me, the psychological difference between $19.99 and $20 is all about the relationship between the buyer and seller. If I'm giving money to a real person that I know, I'm going to give $20. $19.99 is more like some sort of "easy payment" I send to some faceless company. As a reader of your blog, I feel like I know you, so it'd be awkward to do $19.99. Louis CK is also someone I feel that I know through his work, so paying $5 instead of $4.99 for his latest album makes sense, and in some way makes the transaction feel a bit more personal.

The link to pay $19.99, 20 bucks, or more for an independent, ad-free Dish is here. The whole staff is working overtime to roll out the new site by February 1st.

(Chart from TinyPass. Statistics current as of 5 pm Sunday.)