Transcription
Someone left an interesting comment on one of my videos the other day, and they said, "Scammers always end their prices in a seven." And I thought, well, there's actually a genuine behavioral observation buried in there, but the conclusion is completely wrong, and the the the the why of that idea of sevens being scam is is worth unpacking and understanding a bit more.
So, I think, let let's start with where pricing in a seven actually comes from, because it's interesting and most people um who use it have no idea why they use it. So, there's a man called Ted Nicholas, and he was a direct response uh copywriter and marketer. He was big in the very in the late 70s and early 80s when direct marketing, as in things you would stuff into an envelope and post people through the door, would was big. It was huge, and Nicholas was, I suppose, by all accounts the best in his field at it, but he was also a fanatical tester. He would split test everything: headlines, envelope colors, orders from layouts, and at some point he started testing price endings within his mail order campaigns. And what he found, or at least what he reported at his seminars anyway, was that prices ending in a seven outperformed prices ending in five or nine. So, $97, which is what he was using at the time, um out outperformed $99, $47 beat $49, that sort of thing. And then a chap called Gary Halbert picked it up, and then Dan Kennedy, another chap, picked it up. These were two of the biggest names in direct response copywriting at the time. And within a few years, as anything like this does, it became gospel around the world. Everyone was then pricing in a seven. And I think it's rather important to understand because the the seven convention didn't actually come from any sort of academic research or consumer psychology. It came from one person split testing in direct mail, and then it was shared at industry seminars. Now, you have to remember this was way before YouTube and stuff like that. So, people actually went to these seminars and paid good money to go to them as well. And then it was repeated so many times that it actually started to acquire the weight of established science.
Now, the actual academic research on charm pricing, charm pricing is the the practice of pricing just below a round number. So, for example, 100 pounds becomes 99 pounds, or 1,000 becomes 999, 999 becomes 995. We also call this the left digit effect. And this research is is is very robust, and it's it's it's well replicated. But it the the research is almost entirely about prices ending in a nine. So, Thomas and Morwitz uh published uh a rather good paper on this, showing that consumers processed the leftmost digit first. And that's why we call it left side pricing. And that's what anchors them to the price. So, $799 feels meaningfully closer to $700 than it does to 800 simply because the seven is in the price. Even though the rational difference is, of course, trivial—it's a dollar. But it works. What isn't solid is any peer-reviewed evidence that seven specifically outperforms nine. The seven convention is, it's a practitioner tradition. It's passed down through the direct response community. Kind of like a family recipe, when you think about it, that nobody has actually ever checked against the original recipe. But it's been passed down so much that it's become everybody believes it as as, you know, as a fact.
So, I think the question is, why does that person who commented associate prices ending in a seven with being scammed? Well, that's what we call evaluative conditioning. Evaluative conditioning. And it it it works rather differently from how most people would assume. So, every time someone encounters 97, 197, 497, 997, 1997—you've all seen them because they've been attached to courses called something like, you know, six-figure blueprint to freedom or passive income mastery or whatever. And generally speaking, they're delivered by somebody invariably standing in front of a rented Lamborghini or Ferrari, aren't they? And so, the the number and then the context become paired together. The commenter isn't actually making a rational judgment about prices pricing strategy. What they're doing is they've been conditioned to have an emotional reaction to the thing attached to the price. And I think the rather important um thing about evaluative conditioning is that it's resistant to extinction. So, even when you explain to someone that the number seven is completely arbitrary and has no inherent connection to fraud, the feeling of distrust just persists. Which means anyone still using 97 pricing or seven pricing is now actually fighting a learned aversion in a growing portion of their audience. And they can't reason their way out of it because the aversion was never rational to begin with.