If you visit Mike Mann’s DomainMarket.com, you’ll notice that the majority of prices for domain names end in an “888”. For example, Atronic.com, Artetica.com, and Fotographic.com all hold a buy-now price of $294,888.
This type of pricing strategy seems to work well for Mann, but why? It could be to do with price precision.
According to a pricing psychology resource compiled by psychology and marketing expert Nick Kolenda, precision with large prices can be more effective than rounded prices such as $295,000. Here is Nick’s take on precise pricing:
Based on 27,000 real estate transactions, specific prices (e.g., $362,978) are more effective than rounded prices ($350,000; Thomas, Simon, & Kadiyali, 2007)
Why? Maybe buyers are less likely to negotiate?
That’s what I thought — but nope. We just associate precise numbers with small values.
Think about it. You’re more likely to use specific numbers when dealing with small numbers (e.g., 1, 2, 3). These prices just feel smaller.
Other tactics listed by Nick that might be relevant to domain sellers include:
- Removing commas from prices – apparently, this can make the phonetic size of a number shorter
- Choose prices with fewer syllables – again, to do with the phonetic size of a number
- Reduce every digit in a discounted price – marketplaces such as Squadhelp allow you to display a discounted price. Reducing every digit in a discounted price may improve the sell-through rate
There are also tactics for price presentation on a page, which is useful if you are designing your own domain sales landing page. While this information from Nick is not domain industry-specific, common pricing psychology can be employed across multiple industries. Some of these tactics could be adopted by domain investors.
Pricing strategies are common within the domain industry. Earlier this year, Andrew Allemann of DomainNameWire cited research from The Journal of Retailing and Consumer Services about the effectiveness of prices ending in “111,” such as $3,111. This article helped GoDaddy to test the “111” approach on its own network, with GoDaddy’s Paul Nicks revealing an increase in sales conversions thanks to this structure.
Read Nick’s list of pricing psychology tactics in full here.