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.
lower price software - psychological pricing technique

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.
high-priced software pricing technique

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.

math friendly pricing for SaaS produtcs
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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Zaki Usman

Hello, I'm the founder and CEO at ShoutEx. I like to blog about marketing, mobile and web topics. Feel free to connect with me on LinkedIn.

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