The Left-Digit Effect
Why shoppers perceive prices ending in 99 as much lower than they are, and how to apply left-digit bias to boost conversions and sales.
In this issue
Hey 👋 The Crew here.
Being 39 still feels young. But as soon as you turn 40, there’s an “OK grandpa let’s get you back to bed” vibe… even though 40 isn’t that much older than 39.
So if you want to feel younger, just add one number to the first digit of your age and say “Phew, I’m glad I’m not 30, 40, 50…” It works every time.
And there’s a reason for that.
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In 2023, a group of researchers published a study that took the marketing world by storm.
It was about Lyft. Yep, theride sharing app.
They observed the behavior of 21M users across 600M sessions. The users were offered experimental pricing between the likes of $X.00, $X.09, and of course, the 99-cent mark below X.
In other words, $14.00 or $14.05 became $13.99, and so on.
The result? When the price dropped only slightly, the number of accepted rides spiked.
In fact, the study found that if Lyft did this frequently, it would:
- Increase profits by $0.25 per ride.
- Generate approximately $160M in annual profits.
… All with that little pricing trick.
That trick is called the Left-Digit Effect or Left-Digit Bias, and it’s when we focus on the left-most digit of a number, often perceiving a larger gap between numbers than actually exists.
Even if we understand rationally that the difference isn’t big, we will still intuitively feel a bigger gap.
This isn’t only related to pricing, either:
- When choosing kidney donors, people are more likely to choose someone who is 69-years-old than someone who’s 70, even if they’re born mere days apart.
- Buyers are more likely to perceive a car with 99,999 miles as having significantly less wear and tear than one with 100,001 miles, despite the minimal difference in usage.
And, as we learned from Lyft, this applies to marketing and selling, too.
Three ways to leverage the Left-Digit Effect
Use charm pricing
… Or ”pricing that passes the charisma check.”
Charm pricing is a strategy where you set prices just below a round number—often ending in 9. You’ve seen it many times before. We even use it for our premium products!
This makes prices feel significantly lower than they actually are to our subconscious mind.
This works particularly well for higher-ticket items or bundles because it amplifies perception of value even more:
See how the bundle could’ve cost £50, yet it’s £49.99?
It makes the savings of each particular item in this bundle appear much bigger. When in reality, they aren’t.
When there’s a negative perception about something, go with the lower digit
Sometimes, it’s not the price that puts people off.
It could be something your customer perceives as a negative.
Let’s look at this ad by Volvo:
Notice something interesting? The lease is not 1% or 1.1%, but 0.99%.
In fact, when you think about it, it’s much easier to accept lease risks when the first number you see is zero, right?
Right! So you can make any negative number appear less impactful by “reducing” it to a lower digit, for example:
- Delivery in 29 minutes, instead of 30.
- Only 1.99% sugar per serving, instead of 2%.
- Average downtime of our app is only 0.5 hours per month—instead of 30 minutes.
Of course, be honest and ethical in your estimations.
You don’t want negative feedback due to misleading your customers.
Leverage left-digit effect to make it look like more
When you decrease the price a bit, it makes your product seem more affordable, and makes negative effects appear less impactful.
But there are certain situations where you want to pump those numbers up.
For example, a 5.0 rating is often seen as too perfect, hence “shady.” But a 4.0 rating isn’t.
However, customers view a 3.9 rating as a much worse rating than 4.0 or 4.1, even when the difference is minor. So you might want to encourage customers to push products over key thresholds such as these.
It’s the same when it comes to positive impact:
- “Made from 88% recycled plastic” becomes “Almost 90% recycled plastic.”
- “Reduce your carbon footprint by 4.6%” becomes “up to 5%.”
And so on…
So remember: The Left-Digit Bias is not always about taking. It can be about giving as well…
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ICYMI, last time we looked at the Fresh-Start Effect.
The “Left side preferred” Crew
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