Psychological Pricing in Software
I just heard Canada is dropping the penny – it costs the government more to make it than its actually worth. So does this bring an end to psychological pricing – no more $9.99 offers in Canada?
How is Software Priced?
This made me wonder how software vendors are pricing their solutions. I came across some interesting trends:
Most lower-priced software use granular pricing ending with .99 or .95 cents. Most of the Mac only products have pricing down to dollar amount – e.g. Coda from Panic software at $99.
Higher-end software products are priced to the nearest dollar, usually ending in nine dollars. Surprisngly some vendors still show .00 trailing amount – which is unnecessary and looks ugly.
Software-as-a-Service vendors tend to stick with whole numbers. I think they might be afraid that SaaS pricing requires mental math (monthly price x users x bandwidth + addons, etc). So they prefer to use “math-friendly” prices.
Last but not least, have a look at the app stores from Apple, Google, RIM and Microsoft. All apps are priced with a trailing .99 cents. Most apps are sold for less than 10 dollars, so I guess at such low prices, the penny makes a difference.
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