Issue 006: Do Prices Ending in 7 Works Better Than 9?
We also talk about how to use science to take the perfect product photo, why giving discounts to new clients destroys business and segmenting welcome emails.
October 23, 2024 | #006 | Free Version
Welcome to Startup Blitz, a weekly newsletter full of timeless ideas and insights you can use in your online business.
This week, we discuss –
✔️ Do prices ending in 7 works better than 9?
✔️ Why you should segment your welcome emails
✔️ How science can help you take the perfect product photo
✔️ Why giving discounts to new clients destroys business
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Do Prices Ending in 7 Works Better Than 9?
Ending prices with 9, or 99, or 999 is a really popular pricing strategy.
And it works. Research conducted by MIT and the University of Chicago discovered that prices ending in 9 were 24% more likely to be chosen over prices ending in 0.
The number 9 creates the perception of a bargain and triggers a sense of getting a better deal, enticing customers to make a purchase.
But ending prices with 7 might work even better. At least that’s what 3 indie hackers found with their product.
Prices ending in 7 are less common. So this makes it catchier and more memorable to consumers. 7 also seems more precise. It gives an impression of careful calculation and discounting.
Why You Should Segment Your Welcome Emails
Not all new subscribers join your email list the same way:
- Some sign up for your newsletter
- Others opt-in after reading your content
- Customers subscribe during checkout
Yet, many businesses send a one-size-fits-all welcome series. This misses the chance to connect based on what initially interested each subscriber.
Boost your email performance by tailoring your flows:
- For newsletter sign-ups, include a sample of your newsletter in the welcome series. This gives new subscribers a preview while it’s still top-of-mind, making them more likely to notice and open future issues.
- For content-based sign-ups, customize the welcome series with more relevant blog posts. Be specific: if someone subscribed after reading a keto-related post, send them more keto content to keep their interest high.
- For customers opting in after a purchase, create a flow that provides tips on using your product. Encourage repeat purchases—53% of customers who buy twice go on to make a third purchase.
How Science Can Help You Take the Perfect Product Photo
When it comes to creating product photos that drive sales, not all images are equal. Research on product images reveals some surprising findings about which types of photos are most effective.
Consider these three options for your product photography:
- A photo of someone holding the product, showing only their hand (without their face).
- A selfie featuring a person’s face alongside the product.
- An image of the product alone, with no person included.
According to the study, photos of someone holding the product—where only their hand is visible—are most likely to increase sales.
In the survey, 74% of customers said they’d be more likely to buy a product after seeing a photo of a hand holding it. This drops slightly to 69% for selfies and 66% for product-only images.
According to the researcher, a hand holding the product invites us to visualize ourselves using it, as if the person is offering it directly to us. This mental shift makes buying more appealing.
Book of the Week: Mastering Services Pricing by Kevin Doolan
This week, I want to highlight Mastering Services Pricing by Kevin Doolan.
In this book, Kevin Doolan, a professor at Harvard Law School, discusses how to meet the needs of the customer/client at a price they are happy to pay.
One important point he addresses is to never offer low prices to new clients hoping you can raise rates later:
“It can be very tempting to price low on the first deal with a new client, or for a new area of work with an existing client, with the view that this will lead to a long and profitable relationship. While great in theory, in practice this is a bad tactical move. Entering into a new relationship with a heavily discounted price can position you as a low-cost provider and is a recipe for an unpleasant surprise when you try to charge your normal rates later.
“For example, let’s say that you are approached by client and you assess after scoping that the particular piece of work will cost £25,740. It is a mistake simply to offer to do it for £15,000. The next time that they have a similar job they will be anticipating a fee of only £15,000, and it would be a shock if you then proceed to charge the normal rate of £25,740.
“You won the work under false pretences. The same applies when quoting hourly rates – don’t start low under the illusion that you can increase rates later. This almost never happens; if anything, subsequent negotiations bring the rates lower still.
“It is much better to find a piece of work you are prepared to do for free. Call it a gift; and the size of the gift will depend upon the size of the potential prize that is available from this client, because then the client is under no illusion that the next job will not be at the same price. The aim of this approach is to have the client understand that this gift is your initial investment in the relationship.
“Say that the price is £25,740, but as this is the first time that you have worked on this job you will reduce this to £15,000 as a one-off to show investment in the relationship. That achieves the same effect of making clear that the true price is £25,740.”
Interesting Articles We've Read This Week
☕ The Starbucks effect: Use names, not order numbers
🏷️ Perfidious pricing: How companies use drip pricing to overcharge consumers
🍕 How slice turns local pizzerias into a powerful network
🏷️ The DNA of a great pricing page
😴 Strategies to build better sleep habits for leaders
Thanks for reading, until next week!
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