What is SaaS Odd-Even Pricing?

Odd-even pricing is a psychological pricing tactic where businesses set prices using odd digits like 9, 7, or 5 to create the perception of affordability. This tactic uses the left-digit bias, where consumers focus on the leftmost number to round down a price.

Odd-even pricing, often using fractional pricing, creates the perception of a lower value. For example, a SaaS business can create the illusion of savings by pricing their product at $19.99 instead of $20. Although the difference between the two values is small, consumers will perceive it as a more affordable option.

Odd-even pricing, especially charm pricing, can impact a SaaS business’s revenue by framing the products as affordable. In price-sensitive markets, this can impact sales and conversion rates. Additionally, it can bring benefits to SaaS businesses in comparison to the whole-number price tactic.

Regarding SaaS and software products, odd-even pricing can be implemented in several specific situations. 

For one thing, the market your product is part of should be sensitive regarding prices. If customers prioritize cost, then this pricing approach can be an option. Also, if your market is competitive, having a slightly lower price can make customers purchase your products instead of other existing alternatives. 

Additionally, this pricing approach can be utilized when introducing your product to your audience, with activating free trials in a high number as a goal.

Odd-even pricing can have an impact on the SaaS company’s reputation, framing the discount impression, but when employed heavily, it can influence the customer less.