This transcript was generated from the episode audio and may contain minor errors.
Got a really interesting question from a listener today. In more than 2,000 episodes of the podcast, I don't think we've ever looked at this topic unless I'm mistaken, but I don't think so. The question is, is it always better to have prices end in the number nine? If you are in fact pricing a product or a service, you're going to put it on a website, what do you charge? Well, one of our callers has noticed that lots of stuff for sale ends in the number nine. And
they mention stuff on the high end like Peloton bikes, but it's also just random items at the grocery store that cost $5.99 or $14.99 or whatever it is. It's not always like $0.99, it could be like $0.79. Is this some scientifically proven marketing principle? That's basically the question. Is this for a reason or is this just because everybody does it? Is it in fact a
global conspiracy? Is George Soros behind it? Did he find some rogue prices in Hunter Biden's laptop? Or is there really just no reason at all for it? Is it completely random? So of course,
we're interested in this topic from the side hustle angle. If you're going to sell something, like is there some advantage to ending it in the number nine? Are you going to increase conversion, bring in a ton of new customers? Or again, is it completely random? You might be surprised by the answer. I mean, you might not be surprised, but I actually think most people will be somewhat
surprised by the answer. So I'm going to bring you that detailed question from our listener and the surprising or otherwise answer in just 30 seconds. Hi there, this is Jennifer calling in from Stockholm. I'm so excited for season seven. I recently heard that ending a price in nine makes more people buy. Is there any truth to this? Ever
since I heard it mentioned, I've been paying attention and it seems many products are priced that way. $39 a month for my gym membership or $1,499 for a peloton bike. What's so special about $9? Do marketers just price that way because everyone else does? Or is there any reality behind the idea that it affects customer behavior? Thank you so much for your time. I hope to see you on
tour this summer. All right, I'm so glad you raised this question. Like I said, I don't know if we've ever talked about it. We've talked about different pricing strategies and how you determine the value of a product and what a customer is willing to pay and so on. But this specific strategy or tactic, it's called charm pricing. There's actually a name for this. It's called charm pricing. And it's not just
nine. It does tend to be nine. That's pretty common. But seven is also common and sometimes five. So it's these odd numbers nine, seven, sometimes five. Basically, this is a pricing strategy that's used
to make a product or service appear to be less expensive than it actually is. And so is this reality based? Is it not? Is it pseudoscience? Well, there actually has been a lot of research on this. It's not entirely conclusive. But there are some studies that support this idea that the brain
tends to process numbers in a way that makes them appear more attractive when they are closer to a round number and that we perceive prices that end in nine or seven to be more affordable than those prices that ended in a round number. And this is kind of thought to be just because it implies that the seller has rounded down the price rather than rounding it up. So as I said, it's not entirely conclusive, but it does seem that there is something to it. And some studies have also found that it increases conversion rates, which is exactly what you're trying to do when you're selling a product. You don't want to just sell more to more people. You want the prospects,
the web traffic, the potential customers who see the offer, you want more of them to convert. That is the goal. So our caller is right that this is everywhere. It likely is more effective than not. It's not a conspiracy. Brains are just weird. So my recommendation don't hesitate to use
charm pricing in your side hustle. Pretty straightforward. Let us know how it goes. Listeners, you've got questions, feedback, comments, side hustle, school.com/questions. We'll continue to feature them every week along with updates from listeners as they launch their projects. Maybe some special promotions with charm pricing. Let me know. That's all for today though.
My name is Chris Guillebeau. This is Side Hustle School. From the Onward Project.
