What is SaaS Charm Pricing?

Charm pricing is a reliable psychological pricing tactic where businesses set their prices ending in different numbers, most often using the digit 9 (for example, $19.99, $49.95).

This strategy capitalizes on the consumer’s tendency to concentrate on the leftmost number, leading to a lower price perception.

When looking to implement the charm pricing strategy for your own SaaS product, there are three aspects that ought to be considered.

First of all, it would be wise to run several A/B tests between your current prices and variations ending in the number 9. This will tell you the potential impact of the harm pricing approach on your conversion rates.

Furthermore, continue your experiments and test several price variations to identify the appropriate price tag for your SaaS product.

Lastly, you need to consider the nature of your market. Keep in mind that the charm pricing approach functions in price-sensitive industries. Check if your market is part of this category.

Like all pricing approaches and methods, charm pricing has its own set of pros and cons.

To begin with, charm pricing can impact your sales and conversion rates.

Also, charm pricing can create a perception of value and control resources. And this pricing tactic can be incorporated into a company’s approach.

However, it can influence brand reputation. This is actually why luxury and premium brands tend to avoid using charm pricing.

When considering the pricing options for your SaaS products, you need to remember that this decision is influenced by different factors.

The market you are part of is one of them. Charm pricing is a suitable approach for industries where customers consider price tags and look to make budget-appropriate decisions when it comes to their software investments.

Also, when launching a SaaS product into a new market, the charm pricing strategy can be used for starting packages.

Your competition should be analyzed in the process to determine if round prices are employed to create product prices.

Anchoring pricing is a monetization tactic in which a high initial price is used to frame subsequent prices as more reasonable. Charm pricing, on the other hand, uses left-digit bias as the major perception trigger.

Odd-even pricing refers to comparing prices ending in even numbers to those ending in odd numbers. Charm pricing focuses on odd numbers, specifically those containing the digit 9.