The Reality Of Money and Huh?
 

Money is NOT real. It work only because we all choose to believe in it as a legitimate buying/selling medium.

What would happen if suddenly the guy in the TV store wanted a piece of gold instead of notes? Of course you'd walk away and go to another TV store.

And if you wanted to pay with a nugget of gold the store owner would tell you where to go.

BUT, if we all changed. If we all lost our belief in the paper money...

> A good way to find out the perceived value
> of money for a given person is to ask the
> question..
> "If you were to go to a casino... How
> much would you be prepared to lose at the
> roulette table, black Jack or the slots
> before you walked away?"

Why is this a good way?

> The amount of money a person is prepared to
> gamble and lose is a good indication of a
> person's ability to take a risk... Money
> wise.

This is a false statement. Not true.

> If a person is prepared to lose $100 at the
> casino and walk away without blinking an
> eyelid.. Then it's not hard to sell that
> person an ebook for example for that amount
> or less, if you can convenience them it will
> make them money, etc.

I'll bet you $100 this is not true as well.

In fact, I'll bet you that $100 that the inverse is actually the case. The person who does not blink at losing $100 when Gambling is a Hard Sell on an info product. And even harder on an eBook!

In fact, research indicates a direct correlation between non-gambling and success and gambling and non-success. In other words, successful people do NOT gamble while unsuccessful people Do.

You only have to look at the gamblers to see this. And read Stanley's Millionaire Next Door series. He discovers this as well.

> Also people spend money based on
> "lots".
> A "Lot" is an amount of money we
> "think in".

Sorry, disagree with this.

That's why things end in 99... because people don't think in these "lots". It ends in 99 and we generally think of the number BEFORE the 99, not up.

$8.99 is eight bucks to us. $299 is two hundred to us.

Michael Ross.

Money is NOT real, gamblers, "99".... Huh?
 

> Money is NOT real. It work only because we
> all choose to believe in it as a legitimate
> buying/selling medium.

Money... Paper money IS VERY REAL!
Before paper money, people used to have to carry heavy bags of silver, gold and even salt.
Paper or even plastic money (credit and debit cards) is for convienvence. Today we are fortunate enough to live in a world where you can buy and sell goods and services without any physical money changing hands. Just debits and credits between our bank accounts.

Money is simply an "I.O.W" we can exchange for goods and services... The real value is backed by the issueing Government.

Money makes it fairer for all of us.... In the caveman days, life was not as fair...
If I was good at making "spearheads" and you were good at hunting... We could trade what we were good at... You give me meat to eat, because you are a good hunter and in return I make you the weapons to hunt.
However... The poor caveman who was good at nothing, with no trade to "swap" or barter... Would starve to death. So instead of swapping services we all agreed to a unit of universal exchange...Call it paper money, salt, gold, silver... At the end of the day they are only "I.O.W's" we all agree to accept for whatever services or goods we offer.

> What would happen if suddenly the guy in the
> TV store wanted a piece of gold instead of
> notes? Of course you'd walk away and go to
> another TV store.

It used to be that way less than one hundred years ago and during the war years.

> In fact, I'll bet you that $100 that the
> inverse is actually the case. The person who
> does not blink at losing $100 when Gambling
> is a Hard Sell on an info product. And even
> harder on an eBook!

I've sold lots of ebooks to associates who are gamblers.

> In fact, research indicates a direct
> correlation between non-gambling and success
> and gambling and non-success. In other
> words, successful people do NOT gamble while
> unsuccessful people Do.

I have to disagree... Successful people are "risk takers", and some of the wealthiest people in this world are gamblers.

Take Australia's richest man, Kerry Packer, not only is he a "high roller" betting in $100,000 "lots" but he also owns the Casino in Melbourne.

If successful rich people were not gamblers, then explain why every casino in the world caters for the high rollers with special gambling rooms set aside to service these "rich" clientele.

The difference between being a success and a failure is often the case of being prepared to take a "risk"... A calculated risk maybe... But in essence "risks are a "gamble" ... Life itself is a gamble everyday of our lives. We can chose to be a player or non-player in the game of life.

> That's why things end in 99... because
> people don't think in these
> "lots".

The real reason prices end in "99" is not what most people believe it's for... A marketing ploy to make things sound cheaper.... No. Sir.

It all started years ago, when supermarkets realized that if they were to price a product at $5.00 or $10 even... Then it would be easier for the shop assistants.. The people on the check out cash registers to "pocket the money"!!!

You see if a product was priced at $9.99 instead of $10.00... It would FORCE the assistant to OPEN the cash register, place the $10 bill in the tray and GIVE the customer their ONE CENT change!!

(Most customers of course would never hand over the EXACT amount of $9.99, always a $10 or a $20 note FORCING the assistant to give them change).

When products were priced at EVEN amounts, stores lost thousands of dollars due to the customer handing over the EXACT AMOUNT and not waiting around for change or a receipt....The cashier would not have to open the till infront of the customer and therefore the temptation existed to pocket the money!!

> $8.99 is eight bucks to us. $299 is two
> hundred to us.

I think most people are smart enough to realize that $299 is $300 and would not round down to $200.

Warmest Regards & $uccess

Ricky Higgs

Double Huh?
 

I wrote: Money is NOT real. It work only because we all choose to believe in it as a legitimate buying/selling medium.

Then, after your effort to prove me wrong, you agree with me: "At the end of the day they are only "I.O.W's" we all agree to accept for whatever services or goods we offer."

> I've sold lots of ebooks to associates who
> are gamblers.

Bully for you. What were those books? How to win at gambling?

> I have to disagree... Successful people are
> "risk takers", and some of the
> wealthiest people in this world are
> gamblers.

Yes they are. BUT, the were successful and wealthy BEFORE they gambled.

> Take Australia's richest man, Kerry Packer,
> not only is he a "high roller"
> betting in $100,000 "lots" but he
> also owns the Casino in Melbourne.

Again, successful BEFORE he was a gambler.

> If successful rich people were not gamblers,
> then explain why every casino in the world
> caters for the high rollers with special
> gambling rooms set aside to service these
> "rich" clientele.

Sure I'll explain it... even though you dodged my question from the previous post...

Because they made their money BEFORE they decided to use it in the enjoyment they get from the atmosphere at the casino.

Geeze Ricky, if what you say was true, then there must be a real lot of successful people in Australia. You can see them all over the place. At every poker machine in every club. Every TAB all over the country. Every Saturday at the newsagents buying their lotto and scratchies.

Look. Admit you made a boo boo and move on. Trying to defend your position is a no-win situation.

> The real reason prices end in "99"
> is not what most people believe it's for...
> A marketing ploy to make things sound
> cheaper.... No. Sir.

Oh... well I guess all those price tests all throughout the years are wrong then, hey? I guess Ted Nicholas didn't know what he was on about by ending all his stuff in a 7. If only he knew what you do, he could have saved himself hundreds of thousands of dollars testing his price points to see what worked best. (can you feel the sarcasm?)

> I think most people are smart enough to
> realize that $299 is $300 and would not
> round down to $200.

You think? Means you don't really know. All you need to do is LISTEN to the WORDS people use. MOST people refer to an item which sells for $299 as $200. Listen and you will here it.

Whatever. I can't be bothered with this any more. It's a pointless discussion.

Have a nice day :o)

Michael (I wonder if Ricky is going to respond to get the last word in, knowing that I'm done with this discussion) Ross.

Controlling money, rather than being controlled by it....
 

Hi Sandy!

Thanks for sharing your point of view, it's a refreshing way to look at things.... :)

I agree with you that the universe is abundant... There really is plenty to go around. One of the interesting things about creating things to sell, and buying and selling (as a trader), is that I think you get a better handle on how money really works....

As an employee, I think you never really learn it. At least I didn't as an employee! Money just appeared in my bank account and I didn't think about it further....

Most people sell their services as employees, but I think it's instructive to try out some of the other ways of making money too, to get a better idea of how it all works.

Because of a fear of money, many allow it to control their lives.... But with experience, you learn to get on the other side of the table, so that you're doing the controlling, rather than being controlled....

- Dien

Re: Controlling money, rather than being controlled by it....
 

Dien -

> Because of a fear of money, many allow it to
> control their lives.... But with experience,
> you learn to get on the other side of the
> table, so that you're doing the controlling,
> rather than being controlled....

And that, of course, was also one of Rich Dad's points about moving to the right side of the Cashflow Quadrant.

Rick Smith, "The Net Guerrilla"


The Home for Guerrilla Product Developers

Re: The Reality Of Money and Huh?
 

Michael -

> That's why things end in 99... because
> people don't think in these
> "lots". It ends in 99 and we
> generally think of the number BEFORE the 99,
> not up.

> $8.99 is eight bucks to us. $299 is two
> hundred to us.

And some will remember the testing Ted Nicholas did to find out if it made a difference in sales whether the price ended in 97 or 99.

Rick Smith, "The Net Guerrilla"

Re: Money is NOT real, gamblers, "99".... Huh?
 

Uh, Ricky...

> Money... Paper money IS VERY REAL!
> Before paper money, people used to have to
> carry heavy bags of silver, gold and even
> salt.

> Paper or even plastic money (credit and
> debit cards) is for convienvence. Today we
> are fortunate enough to live in a world
> where you can buy and sell goods and
> services without any physical money changing
> hands. Just debits and credits between our
> bank accounts.

> Money is simply an "I.O.W" we can
> exchange for goods and services... The real
> value is backed by the issueing Government.

You're contradicting yourself. First you said that paper money is real. Then you said that paper and plastic money is for convenience and we all just swap debits and credits between our bank accounts and physical money doesn't have to change hands. Then you said that money is simply an IOU and that the real value is backed by the issuing government.

I've recently been doing a little study on this whole matter so perhaps I can help.

Paper money is based on a concept called "fiat currency." Fiat currency only works when *people*, (that is those that receive the notes of the issuing government), have confidence in the issuing government. It really has nothing to do with being "backed by the issuing government." Since no government in the world, (that I know of), now backs their paper money with a precious metal standard, the only thing the governments have with which to back the fiat currency is the goodwill of the people towards them. So it gets back to the confidence of the people in the government which issued the notes. A good example of this is what happened with Weimar Republic marks in Germany, (I believe it was after WW I). The legend goes that a woman was hauling a wheelbarrow full of money down the street. She stopped somewhere and left the wheelbarrow full of money outside an establishment. Someone came along and stole the wheelbarrow. Now, I don't know if there's any truth to the legend itself but my reading of history tells me the concept is correct.

> I think most people are smart enough to
> realize that $299 is $300 and would not
> round down to $200.

It's not an issue of being smart or not smart. It's an issue of psychology. There have been numerous tests that have proven, in general, people are more inclined to buy a product that ends in 99 than one that is rounded up to the next dollar. Ted Nicholas went even further and proved that, in general, the people that bought from him and his clients were more inclined to buy a product ending in 97 than the same one ending in 99. But like all issues in marketing, your mileage may vary and as always, we have to test for our own situations.

Rick Smith, "The Net Guerrilla"


Where We Discuss REAL Guerrilla Product Development Techniques

Rounding up versus rounding down....
 

Hi Rick,

Thanks, an interesting post! :)

> It's not an issue of being smart or not
> smart. It's an issue of psychology. There
> have been numerous tests that have proven,
> in general, people are more inclined to buy
> a product that ends in 99 than one that is
> rounded up to the next dollar.

I agree, I think the fact it works is because most of us are mentally lazy when we think we can get away with it.... It takes a little bit of extra thought to realize that $2.99 is almost $3.00, but it takes less mental work to just ignore the $.99 and round it to $2.00 !

So, I think that's what many of us do.... and that's probably why it works. Like you said, Rick, it's not a matter of intelligence but rather of psychology.

> Ted Nicholas
> went even further and proved that, in
> general, the people that bought from him and
> his clients were more inclined to buy a
> product ending in 97 than the same one
> ending in 99.

Wow, I didn't know this. Is this in "The Golden Mailbox", or in another book of his?

> But like all issues in
> marketing, your mileage may vary and as
> always, we have to test for our own
> situations.

That's true... It seems that as time goes by some of the rules change, though I believe the basics of human nature don't change by too much. :)

- Dien Rice

Let’s talk about “nonomania”!
 

Hi Rick,

“Nonomania” … Or the “9-fetish”… Or in this case the 99 psychology in pricing.

Rick, since you have entered this thread in a more mature way than someone else who resorts to sarcasm bordering on personal attacks when opposing arguments are presented, I’ll re-enter this discussion.

BTW, I’m used to it by now, it used to be quite common when I posted on another “famous” board, however instead of “biting back”, I gave that person full credit in my much trafficked “Who’s who” list, and still do, even though he has technically retired from the net. I’m also used to sarcasm…. “R.C. Collins” did a fine job of that on a number of discussion boards recently ;-)

Okay… Let’s talk about Ted Nicholas….

Yes, Ted did do testing and research to find out if it made a difference in sales whether the price ended in 97 or 99.
And Yes, he proved that, in general, the people that bought from him and his clients were more inclined to buy a product ending in 97 than the same one ending in 99.

But strangely, few business people and retailers have taken his good advice?

Researchers discovered that the digits “one”, “three” and “seven” are the rarest price-endings and that the prevalence of prices ending with 99 is a purely a Western phenomenon. Chinese, Japanese and other Asian countries shy away from using “nines” in pricing.

Culturally, for many, many years, the Chinese did not use the digit nine for anything,” The “nine” was reserved for the emperor.” Chinese restaurants for instance, typically end menu prices with a six or an eight, digits that are also easier to add or subtract then odd numbers like nine.

The type of currency used in many Asian countries reinforces the reluctance to use nines. It takes so many yen or yuan to order a even just a meal in Japan or China that a single cent doesn’t mean as much as it does in the United states or Australia for example.

Did you know also that a lot of research has been done on the psychological effects “99 cent price endings” have with consumers?

For example, Ohio State University researchers have been studying consumers’ perceptions of 99-cent endings in restaurant pricing. They researched the effect menu prices had on consumers, in terms of prices ending in 99 as against “whole dollars”.

What they found was that although the one cent difference may not be valued very highly by itself, when it is part of a price on a menu, it can be worth a lot in terms of a customer’s opinion of a restaurant.

The university researchers concluded that diners associate 99-cent price endings with VALUE, while a whole-dollar price is more likely to inspire thoughts of QUALITY.
So a $4.99 hamburger has the psychological effect of being a BARGAIN, while a $5 hamburger must be really good and of better QUALITY.

The researchers collected menus from 231 restaurants in the Columbus area to look for trends. They then gave 73 people one of three versions of identical menus—with different prices—to determine if the one-cent difference evoked feelings of “quality” or “value.”

They discovered that high-end, fine dining restaurants should stay away from using menu prices ending in 99, 98 or 97 cents, as it gives a conflicting image…. You could be insulting the consumer!

Fast food and casual dining restaurants on the other hand can use this psychologically “price lowering 99 cent” ploy as they are selling VALUE for money rather than projecting the image of QUALITY. They are focusing on keeping everything as cheap and value-oriented as possible.
How a retailer, offline business or online marketer, “prices” their products can tell a customer a lot about the “priorities” of the business. For example on my own website, I decided to price my latest info-pack at a “whole” $10 rather than the psychologically quality lowering $9-99 or $9-97.

As I always say, the proof of the pudding… The real test…. Is in the results obtained…. Guess what, without blowing my horn, or trying to self promote myself here on Dien’s good forum… It’s going “gangbusters”… I can hardly keep up with the daily manual entry of credit card orders in my Bank merchant account paperwork!

Why are so many marketers and retailers resorting to using the “99 cent” pricing strategy?

Well according to the research by Professor “H.G. Parsa”… It appears that it’s simply a case of
“monkey-see, monkey-do”…. It’s being going on for so long in the retail world that few people stop to think about the “QUALITY” versus “VALUE” issue, and the image they are portraying for their business!

Other pricing research has also found that consumers are IGNORING prices that end with “9” BECAUSE people ignore THE LAST DIGIT!

In their analysis, the researchers statistically accounted for factors such as brand loyalty, advertisements, and the impact of in-store displays so they could focus just on how consumers processed the price information. They found that the best explanation for the purchase decisions was that consumers processed prices from LEFT to RIGHT -- and stopped at the first digit that was different when comparing two prices. For example, if a consumer compared prices for two competing products…. one $1.59 and the other $1.64 …. They would notice the difference between the middle digits (the "5" and the "6") and not pay attention to the final digits of the prices!

As far as what I originally said about how the “99 cent pricing” has been used in “retail store security”…
> It all started years ago, when supermarkets realized that if they were to price a product at $5.00 or $10 even... Then it would be easier for the shop assistants.. The people on the check out cash registers to "pocket the money"!!!
You see if a product was priced at $9.99 instead of $10.00... It would FORCE the assistant to OPEN the cash register, place the $10 bill in the tray and GIVE the customer their ONE CENT change!!

This is still true… I learnt this back in 1979 when I served my “consumer marketing apprenticeship” in the retail world. This was taught to me by the marketing manager of a large food chain (Known as “Coles Myers” in Australia… One of our countries largest retailers).

So while Ted Nicholas might have been conducting experimental price marketing on the “99 – 97 “ cent issue…. The same pricing strategy was being used for different reasons in the retail world.

I could go on and on about pricing … It’s uses and emotional effects on consumers, but I think you get the picture.

Warmest Regards & $uccess

Ricky Higgs




More Than $9-97... But Selling Like Hot Cakes!

Re: Let’s talk about “nonomania”!
 

Ricky -

> But strangely, few business people and
> retailers have taken his good advice?

I would suspect that if you asked most retailers and business people about Ted's testing, they would say, "Ted who???" There's a fairly good reason for that. As well known as Ted is to many of us, Ted is still relatively unknown outside a fairly small circle of direct response marketers. That's because Ted focused on direct response marketing; not general business or retail.

> They discovered that high-end, fine dining
> restaurants should stay away from using menu
> prices ending in 99, 98 or 97 cents, as it
> gives a conflicting image…. You could be
> insulting the consumer!

Interesting. But since I have never tried to market anything in a high-end, fine dining restaurant, I personally wouldn't worry much about this. My focus is on how much people want to pay for my infoproducts. And Ted's results speak much more directly to this issue.

> As I always say, the proof of the pudding…
> The real test…. Is in the results obtained….
> Guess what, without blowing my horn, or
> trying to self promote myself here on Dien’s
> good forum… It’s going “gangbusters”…

Yes, but did you test the different price points by using rotating order forms or by some other method? Just because the product is selling well at $10.00, means nothing in and of itself unless you have tested it against the other price points. It might sell better at one of the other price points. It might sell better at $19.97.

>I can
> hardly keep up with the daily manual entry
> of credit card orders in my Bank merchant
> account paperwork!

I'm curious as to why you're not using one of the many automated methods of credit card payment.

Rick Smith, "The Net Guerrilla"


Guerrilla Product Developer's Discussion Where We ALWAYS Round Up!