CONTESTED
Charm pricing works; prices ending in 9 sell more.
Real field evidence, narrow effect. Anderson and Simester ran three field experiments with a mail-order retailer and a $9 ending raised demand every time; a women's clothing item sold more at $39 than at $34. The lift was stronger for new items and was dampened when a Sale cue ran alongside it, and the authors warn it is not a universal law. Not a myth, the experiments are real. Not clean verified, it is conditional and can backfire on premium goods.
Primary source: Anderson and Simester, Effects of $9 Price Endings on Retail Sales, Quantitative Marketing and Economics · 2003-01-01
Evidence status: Field-experiment evidence from a mail-order retailer; effect narrow and conditional · Source link: Available · checked 2026-08-09
Do instead: Use a 9-ending most confidently on a new item with no competing discount signal. Keep a round number on premium or enterprise positioning, where a 9 can read as cheap. Test it on your own prices rather than treating it as a law.
Category: Pricing Psychology · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass).
Check this claim interactively
CONTESTED
A three-tier page makes the middle option win.
The attraction effect is a real lab finding (Huber, Payne, Puto, 1982; Ariely's Economist demo shifted print+web choice from 32% to 84% among 100 students). But the middle wins misstates it. A decoy lifts a specific target it is built to dominate, not the middle by position, and Yang and Lynn's replication work found it fragile once options look like real products instead of two-number abstractions. Effect real; the always three tiers rule overshoots.
Primary source: Huber, Payne, Puto, Adding Asymmetrically Dominated Alternatives, Journal of Consumer Research · 1982-01-01
Evidence status: Lab effect real; fragile with realistic stimuli per replication work · Source link: Available · checked 2026-08-09
Do instead: Only build a decoy tier that is worse than the single option you want chosen and not worse than any other. Adding a third price does not summon the effect. Treat any lift as a hypothesis to A/B test, since it fades with realistic product stimuli.
Category: Page Structure · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass).
Check this claim interactively
VERIFIED_CONDITIONAL
A 1% price increase raises profit more than a 1% volume increase.
Arithmetically true and practically load-bearing on one assumption. Marn and Rosiello's 1992 study of 2,463 companies found a 1% price improvement lifted operating profit 11.1%, versus 3.3% for a 1% volume gain. The 11.1% is real. It also assumes volume does not fall when price rises, which is the entire question a founder is actually asking. The ranking holds only where demand is inelastic.
Primary source: Marn and Rosiello, Managing Price, Gaining Profit, Harvard Business Review · 1992-09-01
Evidence status: Verified arithmetic; conditional on the held-constant volume assumption · Source link: Available · checked 2026-08-09
Do instead: Quote the 11.1% with its assumption attached, that volume is held constant, or not at all. Estimate your own demand elasticity before you assume a price increase pays. The number argues for taking pricing seriously, not that any increase wins.
Category: Business Economics · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass). The 1992 figure is frequently restated in the 2003 Power of Pricing with a different company set; that restated percentage is not quoted here because the source PDF was not machine-readable this pass.
Check this claim interactively
CONTESTED
Value-based pricing beats cost-plus; charge on value.
Direction is plausible and is standard doctrine (Nagle; Hinterhuber), but the controlled evidence is thin and the specific value-based firms earn N% more figures lack an auditable causal method. The likely confound is selection: firms able to price on value usually have differentiated products, and that differentiation drives the margin, not the pricing method alone. Sound reasoning, weak proof.
Primary source: Hinterhuber, Customer value-based pricing strategies: why companies resist, Journal of Business Strategy · 2008-01-01
Evidence status: Direction plausible; causal magnitude unproven, likely selection confound · Source link: Available · checked 2026-08-09
Do instead: Price to value rather than cost, since it removes an obvious leak, but do not attach a specific margin lift to the switch. The gain is specific to how differentiated your offer actually is, not a portable percentage.
Category: Business Economics · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass).
Check this claim interactively
CONTESTED
Annual plans should give about two months free (~17% off).
It is a convention, not a finding. The 16.7% (twelve months for the price of ten) is popular because it is easy to communicate and limits value erosion, and surveys put most SaaS annual discounts between 15% and 20%. No experiment establishes 16.7% as the profit-maximizing discount. It is a Schelling point.
Primary source: OpenView, State of SaaS Pricing · 2023-01-01
Evidence status: Convention with a communication rationale; no experiment establishes it as optimal · Source link: Available · checked 2026-08-09
Do instead: Use two-months-free as a communicable convention if you like it, but do not call it evidence. Model the discount against your own churn and cash-flow data to find the number that actually maximizes your outcome.
Category: SaaS Convention · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass). OpenView wound down as a firm; confirm the specific edition figure before quoting an exact share.
Check this claim interactively
CONTESTED
Free trials convert better than freemium, or the reverse.
Neither wins universally; the comparison is denominator and selection theater. Reported figures put organic freemium-to-paid near 2.6% (about 5.1% with role-based gating), opt-in trials without a card near 8.9%, and opt-out trials that require a card near 31.4%. These measure different funnels on different populations. The better model depends on product, acquisition cost, and time-to-value, not a portable rate.
Primary source: ProfitWell/Paddle freemium and free-trial benchmarks · 2026-01-01
Evidence status: Rates sourced to specific 2026 studies; quote each with its own funnel and year · Source link: Available · checked 2026-08-09
Do instead: Choose the model that matches how fast a buyer reaches value and what it costs you to acquire them. Measure your own product against its own time-to-value and CAC rather than borrowing another company's conversion rate.
Category: SaaS Convention · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass).
Check this claim interactively
VERIFIED_CONDITIONAL
$3.00 feels far more than $2.99.
A genuine, replicated cognitive finding with a stated boundary. Thomas and Morwitz (2005) showed a nine-ending price is perceived as smaller than a price one cent higher only when the leftmost digit changes. $2.99 reads as meaningfully less than $3.00 because the dollar digit drops from 3 to 2. $3.59 versus $3.60 gets little of the effect, because the dollar digit is 3 either way.
Primary source: Thomas and Morwitz, Penny Wise and Pound Foolish: The Left-Digit Effect in Price Cognition, Journal of Consumer Research · 2005-01-01
Evidence status: Replicated cognitive finding with a stated left-digit-change condition · Source link: Available · checked 2026-08-09
Do instead: Use the penny drop only where the leftmost dollar digit rolls over ($3.00 to $2.99, or $5.00 to $4.99). Skip it where the dollar digit stays the same ($3.60 to $3.59), because there is no left-digit rollover to trigger the effect.
Category: Pricing Psychology · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass).
Check this claim interactively
CONTESTED
Anchoring with a high enterprise tier lifts the tier below it.
Anchoring itself is one of the sturdiest findings in decision science (Tversky and Kahneman, 1974): estimates assimilate toward an initial number via insufficient adjustment. Applying it to a pricing page, where a deliberately expensive top tier makes the tier below look reasonable, is plausible and widely practiced, but the specific magnitude for pricing pages rests on vendor case studies, not controlled tests. The mechanism is verified; the pricing-page effect size is not.
Primary source: Tversky and Kahneman, Judgment under Uncertainty: Heuristics and Biases, Science · 1974-09-27
Evidence status: Mechanism verified; pricing-page magnitude untested in controlled work · Source link: Available · checked 2026-08-09
Do instead: State that anchoring is real and that its dollar effect on your pricing page is a hypothesis to test, not a settled multiplier. Set up an A/B test of the tier below with and without the high anchor before you bank a lift.
Category: Page Structure · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass).
Check this claim interactively
CONTESTED
Discounting trains customers to wait and erodes the brand and margin.
Direction supported for consumer goods. Mela, Gupta, and Lehmann (1997) analyzed 8.25 years of household panel data on a packaged good and found consumers grew more price- and promotion-sensitive over time as promotions rose and advertising fell. That supports the training mechanism for CPG. The broader erodes the brand claim and the viral 94% of promotions fail figure are directionally consistent but channel-specific or unsourced at the stated magnitude.
Primary source: Mela, Gupta, Lehmann, The Long-Term Impact of Promotion and Advertising on Consumer Brand Choice, Journal of Marketing Research · 1997-01-01
Evidence status: Training effect sourced for one CPG category; broader magnitudes unsourced · Source link: Available · checked 2026-08-09
Do instead: Treat the training effect as real for consumer packaged goods measured over years, and label it as such. Do not import the viral erosion magnitudes into SaaS, services, or durables without evidence for those channels.
Category: Business Economics · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass).
Check this claim interactively
CONTESTED
Usage-based pricing is beating per-seat SaaS pricing.
A real shift, not a takeover. OpenView found adoption of some usage-based element rising toward a majority of SaaS firms by 2023, but its own framing and outside coverage stressed usage-based pricing is rising, not replacing seat-based models, and most winners run hybrids. The beating narrative is inflated by a few outliers (Snowflake, Datadog), which is survivorship. Trend real; beating per-seat overstated.
Primary source: OpenView, State of Usage-Based Pricing · 2023-01-01
Evidence status: Trend real and sourced; the takeover framing is survivorship · Source link: Available · checked 2026-08-09
Do instead: Plan for a hybrid rather than a wholesale switch. Report the trend as rising, not replacing, and do not model your revenue on the outlier consumption-pricing companies that made the story spread.
Category: SaaS Convention · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass). Exact adoption percentages shift by edition and definition; confirm against the specific report edition before quoting a share.
Check this claim interactively
MYTH
Value-based pricing lifts profit 31%.
Unsourced as stated. A second search could not trace the 31% figure to any auditable study, so it remains myth-grade. What is actually sourced is smaller and named: McKinsey estimates value-based pricing can improve return on sales by 5 to 10%, and Liozu and Hinterhuber find a positive association between value-based pricing and firm performance, not a clean 31% causal lift.
Primary source: No auditable source found for the 31% figure; nearest sourced figure is McKinsey, The Power of Pricing (5-10% return on sales) · 2003-09-01
Evidence status: No auditable origin found; real sourced range is 5-10% return on sales · Source link: Review required · checked 2026-08-09
Do instead: Never publish the 31% as fact. If you need a figure, cite McKinsey's 5-to-10% return-on-sales range with its name attached, and note it is an estimate, not a controlled causal result.
Category: Unsourced Figure · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass). The 31% and the 94%-of-promotions-fail figure both circulate in vendor and consultant content without a linked sample. Do not publish either as fact; see Report 004 Provenance flags. This is a MYTH record (no auditable source), distinct from a Contested claim (real but overclaimed).
Check this claim interactively
MYTH
94% of promotions fail to increase category value.
Unsourced as stated. The 94% figure surfaces in retail-analytics content without a linked dataset and could not be confirmed. The nearest real research is narrower and stronger than the slogan: Mela, Gupta, and Lehmann found, over 8.25 years in one packaged-goods category, that heavy promotion raised long-run price sensitivity. That is a training effect in CPG, not a portable 94% failure rate.
Primary source: No auditable source found for the 94% figure; nearest sourced research is Mela, Gupta, Lehmann on long-run promotion effects, Journal of Marketing Research · 1997-01-01
Evidence status: No auditable origin found; nearest real finding is the CPG promotion-sensitivity effect · Source link: Review required · checked 2026-08-09
Do instead: Do not publish the 94% figure. If you want to make the point about promotions, cite the dated CPG training-effect research and keep the claim inside the channel and horizon that research actually measured.
Category: Unsourced Figure · First reviewed 2026-08-09 · Last reviewed 2026-08-09 · Version 2026-08-09 · Initial published record from Category Gravity Report 004 (August 9, 2026 verification pass). The 94% and the 31% value-based figure both circulate in vendor and consultant content without a linked sample. Do not publish either as fact; see Report 004 Provenance flags. This is a MYTH record (no auditable source), distinct from a Contested claim (real but overclaimed).
Check this claim interactively
No reviewed claim matches that filter. Try the conditions check with the tactic you're considering.