Is the number "7" magic when setting prices? Seven copywriters weigh in. (Promotion).

Newsletter legend George Lutjen, former head of McGrawHill's newsletter division, wrote us: "After reading your November 15 report on newsletter pricing, I thought you might be interested in what I think was the origin of ending prices with a '7.'

"As you know, a group of newsletter publishers got together to form the Newsletter Association. At dinner after one of our meetings, I sat next to Ray Henry. He told me that at one time, what was then Time Inc. thought about entering the news-letter business and had produced a lengthy report which he had read.

"'Ray, did you learn anything that you didn't already know?'

"'Only that prices ending with a "7" will do better than other prices.'

"I was intrigued. The next morning at a meeting with the editors to discuss the coming year's pricing I changed all the prices to end with the '7.'

"I regret that I can't report spectacular results. All the newsletters had renewal rates of between 79 percent and percent, which probably left little room for improvement. I do know the renewal rates did not go down.

"The move had an unforeseen benefit. Many magazine and newsletter renewal checks were made out to McGraw-Hill and wound up in the accounting office where they would be deposited in a general account until the accountants could determine which publication should be credited. They quickly realized that if a price ended in a '7,' it was one of mine."

* Dave Palmer--"The only thing that I can offer is that back in the mid 1990s, when I was with Advisory (b-to-b), we debated using '7' or some other number in subscription prices--e.g., $97 vs. $99. We ended up going with the '7' pricing. If memory serves, our decision was based on 'well, it sounds cheaper than $99.' Also, we thought it might make us stand out a bit from the rest of the '9' offers that were out there.

Trying to put this issue to bed for one last time (also see NL/NL 10/17/02), we asked the opinions of seven copywriters with extensive experience in marketing newsletters.

"We also would increase sub prices by x percent, which yielded some interesting price points like $238 for a full-price renewal.

"By the way, none of this was ever tested in an A/B split to see if the market supported one over the other.

"By the time I left Advisory (end of 2001), we had pretty much given up on all that and I think we were using '9s' as all our price points.

"I'm left thinking that such a thing, at least in a b-to-b market, doesn't really matter. If you can't convince them of your value proposition in your sales pitch, it won't matter whether your price point is a '7' or a '9.'

"Though I've never tested it, I do think the '9' would still beat a '0' (e.g., $249 would beat $250). I think that retail's 'bargain pricing' has been ingrained in us!"

* Betsy Morris--"When I was with CPA Services we addressed this issue and decided to have all our prices end in '7.' This decision was based on testing that had been done by someone at the time (probably in the late '80s or early '90s) that showed higher response for such publications with such pricing. The reason may be that because '7' is a few more digits removed from the next higher price level, the prospect may feel less price resistence than to products with prices ending in '9.'

"To know for sure if this theory is still valid in today's marketing environment, of course, you'd have to test. However, I think there are many other things to test first--such as a $50 or $100 price differential--that would have a much better payback."

* George Duncan--"I'm not aware of any direct price tests by clients but I recall that the '7' and '9' thing is intended to project a more carefully considered price than, say, $200. People are more comfortable with even numbers than they are with odd, and the presence of the odd number in a price is thought to be a stimulus. To attract attention and support credibility."

* Robert Lerose--"Throughout my career, I've read and heard about the magical response-boosting power of the number '7' as a price point, and I've been curious about it, too.

Unfortunately, I don't have any personal verifiable experience from which to speak. I've never worked with a client or promoted a product where we conducted a significant test of the number '7.' So all I have to go on is the 'common knowledge' of its benefit.

"Which leads me to this question: If it does indeed lift response, if it has been proven to everyone's satisfaction, even if it works 75 percent or 80 percent or 90 percent of the time, if it does affect response in a postive direction, wouldn't you think that 'everyone' would set their prices accordingly? That we'd never again see a price ending in '5' or '0' or any other number for that matter?"

* Doug D'Anna--"All I know is that if there is a company that has enough money to spend on testing 'lucky number 7' and not new concepts, please write me because I have a nice bridge I'd like to sell them."

* Roberta Weiner-"Years ago (I hate to say how many) when I was at Capitol Publications, we used to end prices with a '7' because it seemed to sound more 'real' and not as WalMartish (or the WalMart equivalent in those days) as ending with a '9.' This was all gut and no testing, as I recall. $197 as opposed to $199. It still feels better to me and I still have no evidence!"

* Jeff Greenburg--"I need to be convinced of the magic of '7.' Does $77.77 pull better than $39.95? It sounds like $37.97 is better than $39.95. This would mean a 5 percent decrease in price for a consumer letter. Lower prices would need an even higher response to justify the price. At $17.77 vs. $19.95 that's an 11 percent dip. I would be interested if there are any low-priced consumer publications who tested the magic '7.'

"In comparison, I once tested and retested dropping AmEx off of the order form and responses went up five percent. (No, I didn't test a Visa list.) At the end of the day I left AmEx on anyway. It will probably be true with leaving a 'higher 9' than the 'lower 7' in the price."