In 2007 , Coulter and Coulter showed two advertisements to two random groups of customers. Each advertised £10 discounts on flights to Turkey. One listed the tickets at £188. The other showed a higher price: £233.

Customers found that the cheaper tickets felt like a worse value. Why? Researchers found that people more easily differentiate smaller numbers. The difference between 4 and 3 seems more salient than 9 and 8. So, customers were more likely to buy when the prices ended in smaller numbers £244 to £233), compared to those ending in higher digits (£199 to £188).

The takeaway is fairly simple. Next time you run a discount, make the sale price less than five. That’s just one piece of pricing advice that we’ve discussed on my podcast Nudge , the U.K.’s number one marketing podcast.…