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The Powerful Influence of Pennies-a-Day Price Offers | Psychology Today

Sellers and fundraisers have used pennies-a-day price offers for decades. It’s a popular and effective way to quote a price. Magazine publishers first began promoting their subscriptions on a per-issue basis instead of an annual price back in the early 1980s. Consumer psychologist John Gourville explains this decision was fueled by field experiment results conducted by Time Magazine and others. The companies tested response rates for per-issue ($1 per issue) vs. per-year ($52 per year) offers. They consistently found per-issue offers to be 10 percent to 40 percent more effective in enticing new subscribers. Even today, the New Yorker, the Financial Times, and others, routinely solicit new subscribers this way.

There is also considerable academic research evidence that pennies-a-day offers are successful. In his research, Gourville has found it to be effective. In one study, for instance, participants were asked to donate to a worthy cause through payroll deductions. When the request was framed as “an ongoing contribution of 85 cents per day,” 52 percent of those asked agreed to donate. But when it was framed as “a total contribution of $300 per year,” only 30 percent of respondents accepted. Pennies-a-day prices seem lower, and therefore more attractive to buyers.

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The Powerful Influence of Pennies-a-Day Price Offers | Psychology Today.

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