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Look around and you'll notice that there's a trend when it comes to pricing products and services online Many people who sell online use prices like $99 or $97 But they never use a round number like $100 when you ask them. Why the answer is usually the same well? I heard [that] 99 or $97 converts better than $100 because $100 feels like a lot more money I'm Derek Halpern 

 And you're watching social triggers the place entrepreneurs and executives learn to get ahead in [business] in life and in this video I'm going to explain. 

Why [this] idea is flawed [I'll] also show you what to do instead when it comes to price testing keep watching this video Like I said most people use a [seven] or [a] [nine] in their pricing you'll see this online And you'll see it in retail stores even I do it and when you ask Why the answer [is] almost always I heard [a] converts better or in some rare [instances]. 

They'll say years ago I saw a test results that said the best number to end with for online sales was a seven bottom line Is that no one could furnish any of these so-called? 

Test results not for selling online anyway there may be some random studies out there that suggest this [for] retail pricing But that has nothing to do with online pricing, so the question is if a seven or nine really converts better Why is there? No statistically significant test results on it there are countless blogs about split testing and not one [of] these blogs have ever featured a Statistically significant study on the effects of a 7 or 9 as it relates to online selling why because price testing is inherently hard and Expensive you need hundreds of transactions from variable sources before you can build a truly Statistically significant test result as it relates to pricing and again It's expensive [let's] run some hypothetical numbers you send paid traffic to a landing page And you see a conversion rate of a half a percent that means you need to send 200 clicks To make one sale if those clicks cost a buck [you're] spending $200 to make one sale.

But you can't price test one sale verse one sale you need to generate hundreds of sales So let's say you want a hundred transactions to run a price test with what pay traffic reality you want more? But let's say a hundred to make it easy that means you're spending forty thousand dollars to [conduct] one price test And it won't [even] be a good one as I said 100 is rarely enough Especially since it changes based on traffic source now. 

Here's the kicker are you really going to spend that much money just to try and figure out if you can sell something for [ninety] [seven] [dollars] or $99 heck no if you're just starting your business selling something for ninety seven or [four] [ninety] [nine] Isn't going to be the difference [between] success or failure? Yes, there may be an uptick in sales, but there's never going to be [a] big enough uptick to make or break your business So to answer the question what converts better I say it doesn't matter and that's probably why you don't see anyone testing ninety seven ninety nine or even a hundred dollars now Let's talk about what you should test when it comes to pricing when your price testing you're looking for what's known as price Elasticity that means you're looking to raise your prices until you see your conversion drop off so significantly that it doesn't make sense To keep it at the new high price as an example. 

Let's say out of 100 clicks You converted [10%] at a twenty dollar price point that means you make $200 because you'll get ten transactions at Twenty dollars But let's say out of 100 clicks You converted at three percent for a hundred dollars [that] means? You'll make three sales or three hundred dollars now of course more money doesn't always mean It's the right decision, but in that example three hundred dollars is more than two hundred and that might be a good choice now Maybe you're looking for more customers as more as part of your business model Meaning you have a [back-end] where you can sell them more stuff But if revenue is the model it would make sense to try raising prices to $100, but let's say if you raised it to [$200] and you saw a half a percent conversion then you've got a problem because you're going to make less money And that's the turning point when you make less from the same traffic. 

That's a problem you want to find the price at which you can make the most revenue with the same amount of traffic and Doing that can be the difference between making a successful business and a failed business That's why price elasticity is the most important pricing tests to focus on that said there's one Psychological effect I want you to know about it's known as [the] left digit effect long story short When people view prices they look at the left digit and rarely the right digit so many cases $39 seems a lot cheaper than $40 and $99 seems a lot cheaper than $100, but there's one caveat there's new research that suggests this when selling products or services based on a feeling or emotions [a] round number like $40 may work better than a number like $39 But you know what I'm just going to sell for $39 every time because I'm not going to waste my time and money testing for $1 [I'm] going to test for price elasticity and You should too now I have a question for you. 

How [do] you price your products or services online? 

Do you plan to test for price elasticity after watching this article leave a comment? And let [me] [know] I'd love to hear your insights and if you know any business owners selling online Be sure to send in this Article and help them understand What and what not to test when it comes to pricing you'll be helping them out and me too Also, if you haven't Share my Blog, 

You'll receive more exclusive free content about growing your business and more As a bug hahahaha. [I] magnify [plus] a lot more ridiculousness to you guy, See ya.

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