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Pricing - use $XX9 or $XX0

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toddburme

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Big companies always seem to use a nine at the end as people think they are cheaper. I am not so sure that our customers are that price sensitive. Our highest priced room seems to book first or second for the month. Pretty small detail but any insight?
 

Scott

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When we started we used $xx5 or $xx0. We changed to $xx9 a couple of seasons ago. I can't say we've seen a signficant difference in perception of prices, although in a difficult economy it seems that $159 may look better than $160 when compared with $150 or $155. I doubt anyone is thinking "Oh, we'll stay here because it is $159 instead of $160."
For example, see Where does price factor into the destination decision?
Scott
 

JBloggs

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Scott, in my thinking it is more along the lines of us making a bit more by saying $149 to $139 however. One does look better than the other, in my mind's eye.
Marketing facts are facts, even tho I see a TEN when I see a zero at the end, apparently the 9 appears to be that much less. Just ask gazillion gas stations in this country and they will assure you that 9 is the way to end...even tho theirs are really $2.69 and 99, so essentially $2.70
 

Tom

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The Innkeepers here have debated this one. Compromise: business oriented single traveler rates end in 9, most rooms, couple relaxation rates end in 5. Logic? results? who knows.
 

toddburme

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Well with all of the changing factors. I see doing research on this stuff as too hard for the little guy. Maybe you changed your pricing 10 weeks ago but in the mean time your google spots got better/worse and you did a bunch of other stuff so who knows what effect that had? I guess I will stick with Walmart and Mercedes and go XX9.00.
 

Proud Texan

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I worked in the marketing department of a major retailer for a number of years. Apparently there is a method to the madness and there ARE psychological reasons we (that's right I include us as consumers) perceive $14.99 as being a better bargin than $15.00. In fact, most prices never end in zeros.
Wally World is always talking about "roll back prices" when all their doing is knocking a few cents of of some items i.e., $14.99 to $14.67 giving a perception of savings. What they don't tell you is that these items are what are called a "loss leaders" to get consumers into the store where they will buy the "discounted" item but will also impulsively buy other items while in the store at their regular or marked-up prices. So, the retailer actually comes out ahead even though he may have cut the price on one item. Believe you me that they are still making a substantial profit on the "discounted" item.
The "loss leader" concept could work for a B&B if you were selling blocks of rooms. However, it is correct to assume that a room that normally rents for $150.00 might do a little better if it were marketed at $149.00.
 

One Day

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yeah......just the idea of, it is not as much as the whole number...though we know deep down it realy is..does have an inpact...case in point. Tex's reference to $150 - $149.
Ending in odd numbers, other than a 9 also gives that preception...take 5....$155 - $165.....even with 7.....most people will think it less than the next higher round number....$155 is less than $160....$167, less than $170
Using even numbers....it is peceived as trying for that couple $ more.....$156.......not that it is less than $160.....that it is $1 more than $155.........or $168.....is almost $170.....but, $169 is thought to being less than $170.
It's weird.....
 
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