At Konigle we get asked a lot, does Charm Pricing work ? Over 76% of stores that use Konigle, use the Charm Pricing technique. We analyzed over 1.5 million online stores and found stores using some form of charm pricing technique end up making 4% higher revenue than those without.
Yes, there could be multiple reasons for these stores doing better, but we find improved conversions and better brand recall as two major outcomes of using charm pricing techniques.
We analysed randomly selected 1.5 million online stores across the globe to see if they were using a rounding technique for their prices. The different rounding techniques for which the stores were analysed were : 00, 95, 97, 99, 25, 45
The stores were considered to be using the Charm pricing technique if 90% of products were using one of the above mentioned rounding techniques. Approximately 44% of 1.5 million stores were found to be using one of the above rounding techniques. It was also observed that over 83% of the stores had only 25% of their products rounded using one of the above techniques.
Stores meeting the 90% threshold were defined as tactic aware stores. While those not, were called tactic unaware stores for this analysis. Tactic aware stores were found to have 4% higher revenue on average than tactic unaware stores.