Kickstarter Lesson #92: The Psychological Benefits of Ending Price Points with the Number 9

27 April 2014 | 50 Comments

Something that continues to surprise me when I look at Kickstarter projects is that so few project fully implement the power of the number 9. I see games priced at $50, and I wonder why the project creator didn’t price them at $49. You save backers $1 and you offer a psychologically much more appealing price, which could significantly increase the appeal of your project to potential backers.

So let’s talk about 9s today.

You may not realize it, but over the course of your life, your brain has slowly been conditioned to associate any price ending with the number 9 to be a good deal. You may consciously know that it’s not actually good deal, but it doesn’t matter–your brain gets all excited when it sees the number 9.

This isn’t my opinion–there is hard data to back up this claim. Below I’m going to cite a few studies mentioned in this article.

More Is Better

The first study is actually a series of studies compiled and averaged by behavioral psychologist William Poundstone. They revealed that using a price point ending in the number 9 increases sales (number of units sold) by 24%.

Let’s put that in Kickstarter terms: You have a board game on Kickstarter. If you price it at $50, you might get 1000 backers at that level for a total revenue before fees of $50,000. OR you can price it at $49 and get 1240 backers for a total revenue of $60,760, meaning that you not only over $10,000 more than the higher price point, but you also probably just unlocked a stretch goal that gives something cool to all backers.

$39 < $34?

The second study by MIT and the University of Chicago experimented to see if an identical item of clothing sold better at three listed prices: $34, $39, and $44. Guess which price sold the most units?

That’s right: $39. Which, as you might notice, is $5 higher than the lowest price of $34. Although that means you would charge backers a higher price (if you’re deciding between the two), that extra $5 can go a long way when you have to send out replacement parts or games sent to the wrong address. Having a little bit of buffer can help in the long run.

The Killer Combo

Now, there is one pricing tactic that beats the power of 9: comparing the sale price (any price) to the original price. For example, if I tell you that original price of a baseball bat is $28, but I want to sell it to you for $20, you will respond better than if I try to sell you the baseball bat for $19 without any context.

However, if you combine the two methods, you have the most compelling pricing method of them all. I’ll put it in Kickstarter terms:

($29) GAME – 1 copy of the game. MSRP: $40.

Direct Traffic

Yield this newfound power carefully. That is, don’t price every reward with a 9 at the end. Rather, use the power of 9 to steer backers towards the critical levels–the ones that might make or break your project. This ties in closely with my KS Lesson on the Premium Option. For example, look at Tuscany:

($45) TUSCANY – 1 copy of Tuscany with all stretch goals. MSRP: $70.

($59) PRIMA – 1 copy of Tuscany with all stretch goals plus 72 custom metal lira coins. (No MSRP because I won’t be selling this version in retail.)

$45 is a gateway price for Tuscany. My margins are very, very tight at that price point. The price I actually want people to choose is the $59 price, which is better for me because it gives me a little wiggle room, and it’s better for backers because they get a limited edition of the game.

I’m considering a similar pricing model for my upcoming Treasure Chest campaign:

($42) TREASURE – 1 copy of the Stonemaier Games Treasure Chest containing 195 realistic resource tokens (raw and refined versions of stone, wood, brick, gold, ore, and gems). Includes all stretch goals. MSRP: $70

($79) DOUBLE TREASURE – 2 copies of the Stonemaier Treasure Chest with all stretch goals. MSRP: $140.

I don’t usually discount prices for multiple copies of our games, but this isn’t a game–it’s a complementary product to any number of Euro games, and I know that many people are going to want multiple sets for a wealth of tokens. It’s very, very expensive to make this product (as you can tell from the MSRP, which is a bit misleading since the Treasure Chest won’t be available via traditional distribution), so the only way I can offer a discount like that is by shipping multiple units to the same backer. The more we can make, the more tokens we can put into everyone’s Treasure Chest, so it’s good for everyone if people back the $79 level instead of the $42 level.

Note: Those prices are subject to change. The Treasure Chest campaign will most likely launch in May–subscribe to our e-newsletter if you’d like to be notified about that.

***

Some people might think that using price tactics like these are manipulative. But…it’s the good kind of manipulative. Most of the time you’re saving people money, you’re making backers feel good about their pledge, and you’re increasing your project’s growth potential, which–when combined with stretch goals–helps everyone involved.

I highly encourage you to explore the power of 9 on your next project.

50 Comments on “Kickstarter Lesson #92: The Psychological Benefits of Ending Price Points with the Number 9

  1. It’s uncanny that I read the exact article that you reference in this post just 3 days before you posted this. Which is weird because that article is almost two years old, but it is still really great information for anyone who is planning on running a kickstarter, or even pricing their game in the long term.

    1. That is uncanny! I’ve ready about this phenomenon in several books on behavioral psychology, but I wanted to cite something specific in this entry, so that article was a big help.

  2. I learnt in my Marketing study that odd prices ‘$9,99’ prices breath low quality, compared to even prices like $10. I have to search which study proved that, but that’s why I used $65/70.

    1. Martin: I’d definitely like to see that study. I don’t think people think “low quality” when they see a game on Kickstarter priced at $49 instead of $50, but the study could prove me wrong. :)

    1. Martin: To recap from the slide you sent in case people don’t want to download it:

      The slide compares $29.99 vs. $30, and it indicates that it’s the most powerful when the leftmost digit changes (e.g., $29.99 vs. $28.99 isn’t helpful). It also says that the round price is preferred by 66% of customers–they perceive it as more honest and of higher quality.

      This is interesting data, but it’s a bit skewed, because it’s talking about $29.99, not $29 (as the price would appear on Kickstarter). Those extra 9s make a big difference–they still evoke the power of 9, but because it’s just a 1-cent variation in cost between $29.99 and $30, it’s seen as dishonest, which makes sense.

      The other thing to consider is that the studies I cited dealt with actual buying behavior. It sounds like the study cited here merely asked for people’s perceptions about a price. Our subconscious mind is much more powerful than our conscious mind when it comes to pricing (as indicated by the study above about $34/$39/$44–logically you would look at those numbers and say that you would buy the $34 item, but in reality you’re actually more likely to buy the $39 item based on the data).

      So I think the key takeaway here is that you shouldn’t price something with “-9.99” as the final three numbers, but just 9 at the end is still recommended.

      1. Another thing about it being an European study. As stated, prices ending with .99 is almost 100% the norm in the US so I wonder if there is an association with .99 in Europe with “American” products or sales tactics that people may be biased against. If the .99 pricing paradigm has not been a common thing in Europe in the past, seeing it pop up now in retail markets may seem like “American style sales tactics” and might therefore give the sense of them not being truly European, therefore “dishonest”, but only dishonest from the standpoint that it isn’t typical “European” pricing strategy, if there is such a thing. If your pricing structure gives a sense that you aren’t being true to yourself or culture it may come across as “dishonest”.

        “This above all: To thine own self be true.”

  3. Jamey, this is some great advice! I really wish I would have read through this material a few weeks ago prior to my campaign, but it still gave me sound ideas for new reward levels and some possible pieces of information to add to the page.

    But what really blew my mind was the two minute video on the article you linked showing the value of a “useless” option in the middle of two actual price points. Wow! Now that made me sit and think for a minute. But I wonder if using a “useless” option would be something anyone should use with a KS campaign. Anyone this is a little off topic, so I’ll end here.

    Another great article, thanks for posting this Jamey!

    1. John: Oh yeah, the “irrelevant option,” as I call it, is really fascinating (as is all of Dan Ariely’s work). I discuss that from a Kickstarter perspective in that lesson I linked to about the “premium option.” I don’t think a pure form of the irrelevant option works on Kickstarter because it would be confusing for backers to see two nearly identical rewards with the same price, but there are other ways you can implement that strategy.

  4. That’s true, there is a difference between 39,99 and 39,00. I still think 40,00 is more honest, but I do agree that subconsciously, 39,00 sounds cheaper (more than 1,00) than 40,00. I will consider pricing accordingly. Those slides were just a summary of the book, but I can’t access the book right now. I just remember that it elaborated a lot more on the topic.

    1. Martin: I’m not really sure if one price is more honest than the other–they’re simply different price. Not only is $39 a better price for backers, but it also leads to more backers and pledges, which helps everyone if stretch goals are aligned properly.

  5. Very interesting findings indeed. It all leaves me a bit confused, as until reading this post I felt the X.99 was very cheeky and portrayed a dishonest image. Surely if you are buying something for 399 you know you will spend 400, right?

    The strategy you mention on The Killer Combo section, comparing the sale and the regular price, is used by Amazon all the time and found it to be quite misrepresentative of the reality (often the “regular” price is very inflated and never the most usual price over a period of time). See this example http://static.squarespace.com/static/51594a17e4b0ec1768db15c6/t/53459a0fe4b0d513b310328d/1397070352599

    I can see a variety of conclusions from the studies mentioned on the post and comments. It seems like context plays a huge part and elements like branding can skew results. Since Stonemaier Games is awesome, I think the campaign would have worked fine anyway :)

  6. Your $39 < $34 section reminded me of a marketing article I ready a long time ago about grouping products into 3 price points (FYI, I don't remember the exact price points). They used the example of 3 bottles of wine. First, they only had 2 bottles. One sold at $7, one at $15. The $7 bottle was their best seller, the other bottle must have just seemed expensive. After a while, they introduced a $20 bottle of wine. All of a sudden, the $15 bottle became their best seller. People began to associate the $25 bottle being the expensive one, but the $7 bottle suddenly seemed cheap (and low quality) to people. So they starting buying the $15 bottle because they didn't want to get the expensive one, but also not the perceived "cheap" one.

    1. Tony: That’s brilliant. Great example of the power of the irrelevant option. I usually explore these options in sets of two (Tuscany vs. Tuscany Prima, Viti/Tuscany combo vs. Collector’s Edition), but perhaps I should be offering them in sets of 3. I’m just wary to add more SKUs… :)

        1. The theory behind that by the way is that people would like to make a save choice, so they pick the middle one. Works with other stuff too. Say a small, medium and large pot of peanut butter in the store. Ceteris paribus, people will mostly go for the save middle option rather than one of the two extremes. Also, it shifts their minds from ‘shall I buy this’ at one level to ‘which one shall I buy’ at three levels.

          1. Well said, Martin. I particularly like this last part: “it shifts their minds from ‘shall I buy this’ at one level to ‘which one shall I buy’ at three levels.”

  7. I’m a marketing professional and will throw two thoughts into the mix from that perspective:

    1) Prices ending in a “9” (whether $29 or $29.99) are considered “retail-friendly” for the reasons Jamey and others cited in the various studies. However, it brings up an important issue: should Kickstarter be considered a retailer? And should project owners use retail tactics on Kickstarter. On the one hand, these tactics work. On the other, maybe KS should be more about supporting someone’s vision and project and less about a retail transaction. In the latter case, non-retail-firendly pricing like $30 seems more “honest” (as another commenter noted) and more in the spirit of the KS community.

    2) That being said, Walmart and other retailers who wish to create the perception of true discounts use non-9 suffixes to their prices. What’s better than $29.99? $29.88. Or even better: $28.

    1. Randy: Kickstarter isn’t a retailer or a store–it’s a platform for individuals and businesses.

      I still don’t quite understand why $30 is more honest than $29. $29 is strictly a better price than $30, and if it significantly increases the number of backers (as the data shows) and you have stretch goals in place to reward everyone, everyone lives. I don’t think it’s a question of honestly at all–it’s a question of which price is better for backers, and my answer is definitely $29.

      But I’m curious to hear what others think. Which price is better for backers: $29 or $30?

      1. I’m with you, here, Jamey. $29 is better for backers, $1 better, but psychologically a lot better. And, consider the way your backers then talk about your KS to other potential backers. “Yeah, the base game was only like, 20-something!” As opposed to “The base game was 30 bucks.” The creator is losing $1 on each backer, but potentially gaining so many more backers.

        Thanks, again, for sharing your insights!

      2. I’m not sure that “honest” is the proper term, but there is no debate that $29 is a more “retail friendly” price. By that I mean it is a price in keeping with the retail goal of selling as much as possible for the most money. If that is a project owner’s goal with KS then using retail pricing is a valid tactic. I think that some project owners feel that reward pricing should be more about covering costs than maximizing revenue. And yes, $29 is less than $30 — but so is $25.

        1. Randy: Indeed, I am among those project creators who believe that reward pricing should be more about covering costs than maximizing revenue. It just so happens that one of the ways to cover costs, though, is to sell more units, which the power of 9s has proven to do. :)

  8. Well $29 has the same odd pricing as $29.99. It is nearly $30, but it sounds like significantly less. It’s a buck less but it sounds like less money than that. If it works for you, I think you should stay with $29. It’s better than $29.95 of $29.99. I don’t have any problems with it as a consumer.

  9. Hi Jamey

    It’s my understanding that one of the reasons $39 works better than $40 is that it seems much more cheaper to us than the objecitve difference of $1. For the same reason 195 seems like much fewer tokens than 200, so I’m wondering why you’re going for 195 instead of 200, since for this number you want people to think that they’re getting a lot.

    Additional question: Why 195 when you have 12 different kinds of resources? 195 is not divisible by 12.

    Cheers
    – Morten

    1. Morten: There are actually 13 different tokens (2 different kinds of refined gems), and 13 types x 15 tokens each = 195. The number of each resource token we offer will increase with stretch goals, but based on the high cost to make the tokens, that’s where we need to start based on the budget. These numbers aren’t arbitrary. :)

      1. Oh, I know very well that very few things you do regarding your campaigns are arbitrary :-) But adding in five tokens to get a psychologically good number is more or less within the same size of change as changing the price with a dollar go get a pscychologically good number. (The difference between 195 and 200 tokens should be the same as the difference between $39 and $40.) But of course it’ll add up if you do both.

        Thank you for the explanation of how you arrived at 195.

        1. Perhaps this is a false assumption, but I would guess that we’d high a few stretch goals on Day 1, which would let me change that number to 201 quite soon. :)

          I’ll send you the preview page soon and you can let me know what you think!

          1. I agree with Morten, 200 does sound a lot better than 195, for the same reason as $39 vs $40. You could say ‘almost 200 pieces’ though, or mention the raise in bits with stretch goals.

  10. Hello Jamey. Based on this article, I changed my (main) $100 reward level to $99. and then I went ahead and clicked Launch tonight. I have read the other comments here and I agree that the .99 cents always irritates me, but the $9.00 as you discussed, feels like a better deal. Thanks for the last minute confidence booster. It was just what I needed. (if you are curious, my project on KS is The Marble Game!)

  11. Ok – you’ve convinced me. Given that, here’s a great article from CBS/Moneywatch titled “Pricing Psychology: 7 Sneaky Retail Tricks”: http://www.cbsnews.com/news/pricing-psychology-7-sneaky-retail-tricks/

    The article mentions the “9” trick as well as some other tricks designed to get people to buy more, including these:

    – Omit dollar signs
    – Show savings by comparing prices using easy math (“Was $10. Now $8)
    – Reduce the type size on prices

    The article also cites a book that project owners may want to check out if they really want to delve deeper into the world of pricing tricks: “Priceless: The Myth of Fair Value (and How to Take Advantage of It)” at http://amzn.to/1q8mM8t

    1. Thanks for sharing that, Randy (and for summarizing). The only word I don’t like about that article is “sneaky.” I think pricing economics is a really important element of business strategy, not sneaky at all! :)

  12. Thanks for all of your great articles! Do you have any suggestions for how to include MSRP when it’s lower than the KS reward level since the reward includes shipping and MSRP does not? For example, our KS reward is $27 (includes ~$7 for shipping) but MSRP would be $25. Do you think it’s worth explaining this or just leaving out the MSRP? Thanks!

    1. Thanks Amanda! I would recommend adjusting the pricing so the KS reward price is less than MSRP, even when you factor in shipping. Keep in mind that when you end up selling games to distributors post-Kickstarter, you’ll be selling them at a 60% discount off MSRP. For your game, that’s $10 revenue per unit. So I think you’re making your Kickstarter margins a little too good for you, and that might deter backers. I would recommend decreasing your KS reward price to $22 with $5 shipping built into the reward price (then adjust shipping fees accordingly). That’s still $17 revenue per unit, which is much better than when you’ll get via distribution.

  13. Hey Jamey

    I was going to end my prices with something like 29.29, 39.39 etc but after reading this blog post and going through some of the links in it I have changed my mind. People, including me, do follow the path of least resistance. Its much easier to remember and accept 29 in our mind compared to the much ‘larger’ number 29.99. The physical size of the number does leave a negative impression on our subconscious about the product.

    Thanks for another great lesson.

    P.S: Best of luck for Scythe campaign Its doing great right now :)

    Cheers
    Ahmed Nabi

  14. It is interesting to me that in the UK over the last couple of years there has been a move away from the .99 by retailers even (perhaps especially) the lower end supermarkets which used to do it a lot. I’m guessing that the reasoning is that people have become suspicious of the psychology of the .99 price over here and so the retailers are portraying themselves as ‘honest’ by giving the flat price. It will be interesting to see where this goes in the long run.

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