Anyone experimented with $49.95 vs. $50 Pricing for subscription software?

Testing is very important. In some markets $49.95 will beat $50. I know of a test that $10 beat $9.49 4 to 1!

In all things testing is perhaps the most useful thing a start- (or any other company, really), can do.

Testing separates the winners from the losers and continued testing separates the flash in the pans with long tern success.

What you will find is the results are many times not one one would expect & are different in ever market and season.

I would recommend you consider pricing your subscription software without the cents but ending in 9. So in your $50 example . . . use $49. Ultimately, it really depends on the nature of the software solution you are offering, your overall offering mix and pricing structure and who your target customers are.

Value Messaging: It's not the price they don't like, but what they understand they are (or are not) getting for that price.

I tested this number once 19 / 19.99 / 19.95 and in this case (web services) 19 was the winner with 60% more signups

An A/B test using Google Website Optimizer may be the best route here (and it should be very simple to test, though a bit more complex on the back-end payment creation side). My experience has been that even numbers - $50, $100, $250, etc. have more of a "premium" feel vs. $99.95, $79.99, $19.97, etc. which "feel" like more bargain/discount services. However, I don't think anyone's experience is as relevant as testing against your userbase, so that would be my best advice. Every product and customer set is different.

Is it possible to test? Switch between $39.99, $39.95, and $39?

Because that differs less than $1, people probably wouldn't notice or complain if they did notice.

Note the ".95" variant. Some studies show that's better. Also .97.

As a consumer, I've despised the practice of Jedi mind games at places like gas stations. You look on the board and see, say, $2.25/gal. If that's not enough, there's that 9/10th of a cent in there. Why not just sell at $2.26 and be fair?

What does a $19.95 + 9/10th price tag say about your business needs? I feel a little more at ease about a $19 or $20 purchase.

You also have to figure out how budgeting works at the companies you're trying to sell to.

Some may say that any software under $50 (including $49.95) can be bought at the programmer's discretion; anything $50 or over needs a manager's approval. And anything over, say, $500 needs a committee to approve it.

If that's the case, then you'd be better off pricing it at $49 because the extra headaches of going through management makes it 'too expensive'.

There have been cases where software developers have artificially inflated the cost of their software to deal with the committee effect. The committee wouldn't take it seriously enough to approve it if it was priced at $500, but their sales dramatically improved if the cost was inflated to $1000 presumably because it seemed 'better' and more worth the committee's time.

Here are some situations that may/may not apply to your situation:

If people are using an aggregate site to check pricing and they set a filter for " < 50", you wouldn't show up.

Depending if your product is thought of as "high end" it can induce sticker shock.

Also, impulse type purchases may be affected more.

Any chance you could share your testing results?

The obvious reason for choosing a slightly lower price than a round number is to deceive customers into thinking they're paying 49 instead of 50. It partly depends on who your target customers are and whether or not they would be offended by this goal (most of the time probably not).

Unless you have competitors who already price their product at xx.99, there's no real incentive to price yours at xx.95 or lower. Without another product to compare with, if your customer buys at xx.95, there's very little to suggest they would not have paid an extra 4 cents.

1) What are the most common prices in your industry? If you aim for a smoother experience, it's usually better to stick to those. If, on the contrary, you want your price to really stand out, it's better to show a shocking number. And sometimes, a shocking number can simply be '$50'.

2) Who's your target? Consumers may be comfortable with $49.99, but Accountants will find it ludicrous...

3) Test, test, test... If you don't want to change your prices, at least you can test 2 different Ads (if you can reach your audience through ads, that is) or change the prices you show on your site (it's unlikely your customers will complain is they end up paying $49.99 instead of $50).

I think you have to have your head up your ass to pay attention to small differences of .97 .99 and .15. Maybe that energy is better spent actually focusing on customer service or bettering your product.