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Estd 4.22.2023
Based on our book Price to Scale, there isn’t a definitive A/B test result that confirms whether ending your price in a 9 (like $49) versus a 0 (like $50) drastically shifts SaaS buyers’ behavior. Our pricing strategy book mainly emphasizes aligning price points with clear value metrics rather than relying solely on psychological price endings.
Here are a few key points drawn from the book’s approach:
• Our focus is on grounding your price in the value proposition of your product. In our book, we stress translating core metrics into pricing options that clearly convey benefits to your customer—making sure that any price communicated is understood rather than just “charmed.”
• While charm pricing is a well-known tactic in other industries, our methodology for SaaS pricing looks at broader factors—such as tier structuring (good-better-best approaches), volume discounts, and anchoring with industry standards—to create pricing moves that resonate with the customer’s business needs.
• We encourage companies to test different price points as part of their overall pricing strategy. If your rationale or market research suggests that a $1 difference meaningfully impacts buyer perception, then experimenting with such changes on a targeted basis (even if not using the classic charm pricing rationale) could be valuable. However, the book does not provide a direct case study or conclusive A/B testing evidence specifically contrasting charm pricing with rounded numbers.
In summary, while charm pricing is a known psychological tactic, our book Price to Scale recommends that SaaS pricing decisions be fundamentally anchored on value and market dynamics. Any decision to use charm pricing should be viewed in the context of your overall pricing strategy and, if possible, validated with targeted tests tailored to your customer segments.