embrace the irrationality of human beings Most people, including you dear reader, when asked whether they would be more likely to purchase a product at 99c than $1.00 are likely to say; ‘no’! Very few people imagine that 1c is enough to influence a sale (especially when this is only 1%) or that this is […]

embrace the irrationality of human beings Most people, including you dear reader, when asked whether they would be more likely to purchase a product at 99c than $1.00 are likely to say; ‘no’! Very few people imagine that 1c is enough to influence a sale (especially when this is only 1%) or that this is anything more than a less than subtle pricing ‘con’. The fact is, however, what you think might happen and what happens are very different. Some call this pricing tactic (I would hesitate to call it a strategy), the ‘charm effect’. William Poundstone, in his review of eight different studies of the charm effect, found that it led to an average 24% increase in sales. Interestingly, however, other research suggests that this is as much related to the use of the number 9, as it is to the discount offered. Research at MIT considered items sold…