Funny about Money

The only thing necessary for the triumph of evil is for good men to do nothing. ―Edmund Burke

Pricing: Is it all in the presentation?

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We all know the prevailing folk wisdom to the effect that if you price something a penny or two less than a round number, buyers will perceive the cost as less than the actual price. So, let’s say you need to get $15 for your Advanced Digital Doohickey to pay your workers, cover your store’s overhead, and take home a few pennies as net income. You’ll sell more A.-D. Doohickeys if you price them at $14.99 (or even $14.98, such a DEAL!) than if your price tags read $15.00.

Sounds stupid, is stupid. But apparently it works, because everything you see everywhere is priced a penny or two below a round figure.

But…are people really that stupid? Well….

So a couple weeks ago, I decided we should revise our rate schedule at The Copyeditor’s Desk. We’ve been charging a page rate that ranged from three or four bucks a page to $15 a page for the truly unintelligible.

It struck me, after much cogitation, that it would be easier and fairer both for us and for our clients if we charged a per-word rate.

The page rate had proven problematic in several ways. To start with, Microsoft in its infinite changeability has “updated” Word’s page margins from one inch top and bottom and 1.25 inches left and right to one inch all the way around. Since our rates were calculated on the old default, that translates to about a 10% cut in pay for us. So when I tell a client $X per page, I have to make sure we’re talking about the same page size. Changing their page layout, naturally, is off-putting: it looks like I’m trying to extract more than the job is worth.

And we often find prospective clients submitting copy set in 10.5- or 11-point type with half-inch margins. Interesting, isn’t it?  You want me to help you get your dissertation accepted so you can get a cushy academic job instead of working in a rice paddy or a kibbutz, but you think it’s OK to cheat me.

A word rate obviates both those problems: no more figuring out whether the manuscript fits our parameters, and no more arguing over the length altered by the font size. It’s easy for everyone to agree on the number of words, and no hard feelings are generated.

So I changed our billing from $4 to $15 per page to 2 cents to 6 cents a word, depending on the copy’s difficulty and technical level. I calibrated the word rates so they would equate to the similarly sliding page rates — the truth is, on the lower end the word rate adds up to a little less than we were earning per page.

But here’s what:

When people see a price tag of pennies a word, even though the cost adds up to the same as the page rate, they don’t even blink.

And m’dears, the work is pouring in the door. I can freaking not believe it.

Apparently, two or three cents a word looks like pocket change, whereas four bucks a page translates mentally to an extra-large latte for each page. The price is the same. The attitude to it: night and day. Or, from my perspective…day and night.

How amazing is that? Apparently it really is true that people’s perception of how much something costs depends on how the price is presented.

Do you mentally translate the cost of a $14.99 doohickey to $15? Or do you think of it as costing around 14 bucks?

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Author: funny

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4 Comments

  1. I always round up $14.99 to $15.00, because for all intents and purposes, that’s what it is. If other adults aren’t doing this, I don’t understand why. Then again, money is such an emotional subject.
    I like your plan for charging by the word instead of the page. It does make more sense and it’s bringing in more business. Win-win!

    • Hilariously, in the same department, I was once in a store and about to buy something for $19.98 or some such. I can’t even remember the store or the kitsch, but it was some ordinary thing in some ordinary place like a Bed Bath & Beyond.

      I said something like “and then let’s not forget the $20 for that thing…” in the course of chatting. The young clerk gasped and so, “Oh, no! It’s $19.99!”

      I said, “But that IS twenty dollars.” And — hang onto your hat — she ACTUALLY GAVE ME A BLANK LOOK! It seemed to take her several seconds to register that $19.99 is more like $20 than it is like $19.

      American education…in the lowest third among developed countries…sigh…

  2. It’s the same with gas prices. You say you’re paying $2.29 per gallon but it’s really just a tenth of penny shy of $2.30

    • Yes! And think of the times you’ve burned gas to drive across town to a station that’s selling the stuff for $.04 less… 😀