what-is-charm-pricing

Does Charm Pricing Work in eCommerce?

What is Charm Pricing in eCommerce? And how does it even work it? Here's the full guide on the topic.

DOWNLOAD TEMPLATE
Table of contents:

Charm Pricing is also known as psychological pricing. It’s the use of strategies to have a psychological influencer on the shopper and sway them to buy a particular product or service. Charm Pricing is used everywhere and certainly has a central role to play in the eCommerce industry.

One of the central ideas of Charm Pricing is that prices should end with 5 or 9 to have the maximum psychological impact (1997 study). They help the shoppers perceive a gain and an opportunity cost of not buying the product. For example, an item would sell for $5.99 more often than if it was priced at $6.00.

[Add Banner Here]

The benefits of charm pricing

The main benefit of charm pricing is that consumers perceive fractional prices as an increased benefit and a decreased loss. Since losses loom larger than gains (prospect theory) and since most consumers read from left to right, when the price of an item changes from $600 to $599, the "6" changing to a "5" makes all the difference.

The price went down by only $1 but it looks so much more attractive to the average consumer.

To summarize, the benefits of charm pricing include:

  • Increase your sales
  • Easily differentiate sales from regular or full-priced items
  • Compete with lower-priced brands
  • Create customer loyalty
  • Direct buyer attention to specific items
  • Easily automate your pricing to compete over the weekend/holiday season

Do lower prices lead to more sales?

Lower prices do generally lead to more sales but at decreased margins. So if your business can handle a lower margin and could see an overall increase in revenue with the increased sales volume then you should definitely use your strategy. It could also help increase your cash flow and inventory revenue.

Another benefit of lowering prices is that it could eliminate the competition. You could use this strategy for a short period of time to significantly boost your rankings on online marketplaces (like Amazon and Google Shopping).

When charm pricing doesn't work

There are certain instances when charm pricing doesn't work, or doesn't have the desired effect on your sales. For example, luxury brands don't utilize charm pricing because it cheapens the product and the brand image. The price is not an issue in that industry and brands compete on product differentiation and quality, rather than price.

Another example of when charm pricing doesn't work is when you are competing with other brands on an online marketplace like Amazon. There it's more important to be on the top of the list. And the best advice we could give you on making sure that your products always stay competitive is to use pricing automation software like Prisync.

Which pricing strategy is right for you?

Each pricing strategy that you use depends on the type of business you have, the current market conditions, and your ideal customer. You can experiment with different strategies until you find the perfect one.

Want to learn more? Check out our full guide to Pricing Automation for eCommerce.

Author

Share this article:
Share on FacebookShare on TwitterShare on LinkedinCopy URL
Agency
Services
Social media advertising, PPC, Google advertising, native ads, Amazon ads
Social media management, advertising, graph design, web design, SEO, email marketing, branding CRO
Performance marketing, social media advertising, video editing, Google ads, copywriting
Email marketing, social media advertising, social media management & strategy, content marketing
Social media management, paid advertising, content marketing, SEO, email marketing
Conversion rate optimization, landing page design, Shopify development, WordPress
Influencer marketing, graphic design, creative services, influencer outreach
Social media advertising, marketing strategy, display advertising, search engine optimization
Email marketing management, email marketing audits, list management, email segmentation & design
Email marketing, website and graphic design, social media marketing, search engine optimization, copywriting

FAQs

No items found.
Do You Want
More Sales ?
If you want my team to just do
your marketing for you
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Get The Ultimate CRO Audit + Checklist Tool

Get Access Now

Get The Ultimate Marketing Strategy Template

Download Now

Does Charm Pricing Work in eCommerce?

What is Charm Pricing in eCommerce? And how does it even work it? Here's the full guide on the topic.

No items found.

Charm Pricing is also known as psychological pricing. It’s the use of strategies to have a psychological influencer on the shopper and sway them to buy a particular product or service. Charm Pricing is used everywhere and certainly has a central role to play in the eCommerce industry.

One of the central ideas of Charm Pricing is that prices should end with 5 or 9 to have the maximum psychological impact (1997 study). They help the shoppers perceive a gain and an opportunity cost of not buying the product. For example, an item would sell for $5.99 more often than if it was priced at $6.00.

[Add Banner Here]

The benefits of charm pricing

The main benefit of charm pricing is that consumers perceive fractional prices as an increased benefit and a decreased loss. Since losses loom larger than gains (prospect theory) and since most consumers read from left to right, when the price of an item changes from $600 to $599, the "6" changing to a "5" makes all the difference.

The price went down by only $1 but it looks so much more attractive to the average consumer.

To summarize, the benefits of charm pricing include:

  • Increase your sales
  • Easily differentiate sales from regular or full-priced items
  • Compete with lower-priced brands
  • Create customer loyalty
  • Direct buyer attention to specific items
  • Easily automate your pricing to compete over the weekend/holiday season

Do lower prices lead to more sales?

Lower prices do generally lead to more sales but at decreased margins. So if your business can handle a lower margin and could see an overall increase in revenue with the increased sales volume then you should definitely use your strategy. It could also help increase your cash flow and inventory revenue.

Another benefit of lowering prices is that it could eliminate the competition. You could use this strategy for a short period of time to significantly boost your rankings on online marketplaces (like Amazon and Google Shopping).

When charm pricing doesn't work

There are certain instances when charm pricing doesn't work, or doesn't have the desired effect on your sales. For example, luxury brands don't utilize charm pricing because it cheapens the product and the brand image. The price is not an issue in that industry and brands compete on product differentiation and quality, rather than price.

Another example of when charm pricing doesn't work is when you are competing with other brands on an online marketplace like Amazon. There it's more important to be on the top of the list. And the best advice we could give you on making sure that your products always stay competitive is to use pricing automation software like Prisync.

Which pricing strategy is right for you?

Each pricing strategy that you use depends on the type of business you have, the current market conditions, and your ideal customer. You can experiment with different strategies until you find the perfect one.

Want to learn more? Check out our full guide to Pricing Automation for eCommerce.

Browse Agencies by Expertise

Does Charm Pricing Work in eCommerce?

What is Charm Pricing in eCommerce? And how does it even work it? Here's the full guide on the topic.

Charm Pricing is also known as psychological pricing. It’s the use of strategies to have a psychological influencer on the shopper and sway them to buy a particular product or service. Charm Pricing is used everywhere and certainly has a central role to play in the eCommerce industry.

One of the central ideas of Charm Pricing is that prices should end with 5 or 9 to have the maximum psychological impact (1997 study). They help the shoppers perceive a gain and an opportunity cost of not buying the product. For example, an item would sell for $5.99 more often than if it was priced at $6.00.

[Add Banner Here]

The benefits of charm pricing

The main benefit of charm pricing is that consumers perceive fractional prices as an increased benefit and a decreased loss. Since losses loom larger than gains (prospect theory) and since most consumers read from left to right, when the price of an item changes from $600 to $599, the "6" changing to a "5" makes all the difference.

The price went down by only $1 but it looks so much more attractive to the average consumer.

To summarize, the benefits of charm pricing include:

  • Increase your sales
  • Easily differentiate sales from regular or full-priced items
  • Compete with lower-priced brands
  • Create customer loyalty
  • Direct buyer attention to specific items
  • Easily automate your pricing to compete over the weekend/holiday season

Do lower prices lead to more sales?

Lower prices do generally lead to more sales but at decreased margins. So if your business can handle a lower margin and could see an overall increase in revenue with the increased sales volume then you should definitely use your strategy. It could also help increase your cash flow and inventory revenue.

Another benefit of lowering prices is that it could eliminate the competition. You could use this strategy for a short period of time to significantly boost your rankings on online marketplaces (like Amazon and Google Shopping).

When charm pricing doesn't work

There are certain instances when charm pricing doesn't work, or doesn't have the desired effect on your sales. For example, luxury brands don't utilize charm pricing because it cheapens the product and the brand image. The price is not an issue in that industry and brands compete on product differentiation and quality, rather than price.

Another example of when charm pricing doesn't work is when you are competing with other brands on an online marketplace like Amazon. There it's more important to be on the top of the list. And the best advice we could give you on making sure that your products always stay competitive is to use pricing automation software like Prisync.

Which pricing strategy is right for you?

Each pricing strategy that you use depends on the type of business you have, the current market conditions, and your ideal customer. You can experiment with different strategies until you find the perfect one.

Want to learn more? Check out our full guide to Pricing Automation for eCommerce.

No items found.
No items found.


|

Welcome to Mayple, the NEW Way to Hire Expert Marketing Talent

Top brands trust our marketers

prev
next

Jamie Simoni

Jamie helped build American Eagle Outfitter's online community to 15M+ followers and was integral in setting up the award winning Live Your Life influencer marketing campaign.

Gustavo Morais

Gustavo took Amaz, a Yerba Mate sparkling drink brand, from $0 to $50k sales per month in just a few months by designing and launching their eCommerce website and executive a comprehensive SEO strategy.

Jay Neyer

Jay executed a comprehensive SEO strategy that increased organic traffic by 98%, increased top 10 keywords by 190% and total keywords by 262%.

Kelly Beaudin social media

Kelly grew Adobe's LinkedIn community by 97% and increased monthly engagement by more than 1,000% within one year. Adobe was recognized as one of the "Best LinkedIn Company Pages" for two years in a row. Kelly also grew Adobe Creative Cloud to 1M subscribers with a comprehensive social media strategy.

Kelly Beaudin Strategy

Kelly created a partnership with BuzzFeed, launched a financial BootCamp for customers, and created viral content using influencers and UGC. The campaign resulted in a +6.5% lift in awareness and a +25% increase in customers' perception of the brand, helping to drive loyalty and sales.

Roman Hotsiak

Roman created seven email campaigns that led to this beauty brand's revenue to increase by 56% in just 6 months.

Katrina Julia

Katrina led an influencer marketing & PR campaign for this tourism brand that resulted in a funding round of $3M.

Edwin Gan - CRO

Edwin helped CloudWaitress generate 2x conversions for 3+ consecutive months. They gained 10,000 new users and became one of Australia's fastest-growing startups with 700% growth.

Igor Zvagelsky

Igor promoted NY Fashion Week events using Google Ads, increasing the number of attendees at events and decreasing the cost per lead by 50%.

Pete Opakunle - PPC

Pete increased ROAS for Gillette by 4.2X, increased CTRs by 40%-60%, achieved the desired CPA within 2 weeks of the campaign launch using Facebook, Snapchat and Instagram ads.

Angel Djambazov

Angel led influencer marketing campaigns for Keen and helped them grow to over 200k+ followers on Instagram and become one of the most loved apparel brand in the world.

Jason Hui

Jason helped Vitamin Energy grow monthly email marketing revenue 6x in less than 6 months and increased attributed revenue from email to 40% of the total sales of the business.

Ashna Rana CRO

Ashna was the lead CRO manager for PrettyLitter, a subscription product, where she optimized the marketing funnel and was able to increase the conversion rate 35% test after test. As a result, the company was able to expand to Pinterest Ads, Facebook ads, and affiliate marketing.

Brenna Kleiman

Brenna led advertising campaigns at Jessica Simpson where she increased ROAS by 250% using Google Ads, Facebook & Instagram ads, and Google Shopping.

Limor Gurevich

Limor grew our email list by 200% and took our email program from $0 to $6k/month in just a few months using popups + email flows + email marketing automation.

Kelly Benson - Marketing manager & Growth marketer

Kelly developed a 6-month marketing strategy that included paid ads, SMM, mobile marketing, and marketing automation, resulting in an increase in ROI by 1200% in just 6 months.

Jack Nelson - CRO

Jack led the CRO strategy for BeatBread, launched various conversion optimization campaigns, implemented advanced tracking & analytics, and exceeded KPI target by 75%.

Marija Todorovic

Marija grew Brightech's Instagram page to over 30k followers and its cumulative online presence to 200k followers using secondary accounts in just 12 months.

Dorian Reeves SMM

Dorian grew Lenskart to over 10k followers and increased engagement by 50%.

Dan Ware

Dan created a strategic marketing plan for Mountain Dew and produced and executed 360 engagement platforms - Dare to Do, All Star Weekend, and others. These campaigns improved brand awareness, affinity and sentiment levels.

Dhariana Lozano

Dhariana grew Remy's Instagram account to 10k+ followers, increased leads from social media (LinkedIn and Instagram) by 120% and increased organic views on Linkedin by 310%.

Deepak Shukla

Deepak helped Rivalry to rank for 20k+ organic keywords in the US and over 70k+ keywords globally in under 12 months with an extensive on-page and off-page SEO strategy.

Hire Does Charm Pricing Work in eCommerce?

Table of contents

Hiring with Mayple

Reliable

Vetted and backed by AI tracking

Scalable

Avg. Growth of 380% in 6 months

Flexible

Monthly subscription

Easy

3 min to marketing brief

Affordable

1/3rd of typical agency costs

FAQ

One easy-to-use platform that help online businesses and expert marketers to match up, collaborate, and grow their businesses together.

Explore Our Services

Welcome to Mayple, the NEW Way to Hire Expert Marketing Talent

Social Media Manager
Lindsay C.
Social Media Manager
Sergio F.
Social Media Manager
Camila K.

Hire Social marketing experts with data-backed results

The challenge of assessing marketers skills is real. With Mayple you don't need to rely on reviews and fancy sales pitches.

No items found.

The trusted growth partner for many startups, eCommerce brands, and Fortune 500 brands

We are a group of marketing specialists. We work with ambitious brands who have a growth mindset. eCommerce companies with purpose and substance that aren’t afraid to stand out from the crowd.

Weebly
3M_wordmark
CIBC
pampers
Tide
Gillette
BarkBox
Facebook
Ebay
Nespresso
T-Mobile
Nivea
Mountain Dew
Keen Footwear
Dior
ASUS
Priceline.com
Etoro

Hire Does Charm Pricing Work in eCommerce?

HOW IT WORKS

We're Here to Help Your Business Grow

Easy process to hire the best experts for the job.
VIP support from hiring to management and strategy.

1

Tell us about your business

Let us know exactly what you need in our easy-to-fill brief and then hand over the hard work to us.

2

Get matched

Our AI will tap into our 600+ global network of exhaustively vetted experts to identify the perfect match to seamlessly integrate with your business needs.

3

Manage your experts

Keep your finger on the pulse through easy to navigate and comprehensive dashboards embedded into the Mayple platform

Our Customers
Love Us

From SMBs to Fortune 500s, Here’s Why Businesses Choose Mayple

 

You can't get this level of service and care anywhere else. It makes my work much more effective.

Roee Arbel, Co-founder, CoreMasters
 

Mayple was able to help us choose the best marketer for our project. All the marketers are hand-picked and vetted by Mayple.

Deborah Herbet
 

Mayple truly restored my trust in digital marketing again.  I got the best PPC expert I've ever worked with.

Nicholas Taylor
 

Mayple paired us up with a marketing professional who took the time to understand me, my needs, and what I'm trying to do with my business.

Nicole Davies
Nitzan L.
4.9/5

I enjoyed the sales stage, as it seemed professional, attentive and not too pushy. Our sales manager - Sheila, listened and addressed all of our concerns and needs and helped in matching us with the best professional.

Read review on

Melaina B.
4.9/5

It was great getting industry knowledge from experienced professionals. We feel like we gained a ton of insight and created actionable plans to move forward with our strategy.

Read review on

Stephanie B.
4.9/5

They care and really listen to our needs as a company and continue to set calls to discuss future projects they can help with. Their customer service has been top notch

Read review on

Jordan R
4.9/5

They didn't stop until they found the right candidate for me. The best part is your aren't charged anything until you approve your expert.

Read review on

Nikolaus B.
4.9/5

Having the whole bureaucratic setup part handled in Mayple. It’s now a very simple process, which traditionally took multiple phone calls and numerous emails.

Read review on

Elhanan B.
4.9/5

Once we started working together, it was wonderful to sort of sit back and let the magic happen. We were able to see in real-time what was working and wasn’t, and Mayple offered optimization suggestions as well.

Read review on

Keith L.
4.9/5

Mayple connected me with a great marketing partner

Read review on

Yusuf U.
4.9/5

Mayple gave us access to top-performing PPC talent in our competitive market so we didn't waste time shopping around.

Read review on

Katia G.
4.9/5

We love the transparency. We can always keep an eye on how our campaigns in real-time. no more waiting around for a lengthy monthly report which is hard to understand.

Read review on

How it works

One easy-to-use platform that help online businesses and expert marketers to match up, collaborate, and grow their businesses together.

Create your marketing brief.

Create brief

Create your marketing brief.

Find a match

Find a match

Meet your perfect marketing team.

Grow your business

Grow your business

Get ongoing monitoring and strategic advice.

Find the Perfect Marketer
Get started

Hire top vetted marketers

Talk to an expert
I hope you enjoy reading this blog post.
If you want my our team at Mayple  to help you get more sales, just book a call.
Schedule a call