Does Your Pricing Strategy Need a Refresh with the Penny Gone? Yep!

We are no longer making pennies! OK, so this isn’t major news, but what will it do to your pricing strategy?

One thought hit me immediately.

What happens to every price that ends in .99?

That question sent me down a rabbit hole. Not the “round up or round down” debate—the real one. The conversation every business owner tries to avoid because pricing feels stressful, emotional, and somehow both too important and too mysterious to get right.

But here’s the thing.

The penny disappearing created this weird opening. Everyone’s thinking about prices again. It’s the perfect excuse to take a fresh look at pricing strategy for small business—not just the .99 endings, but the whole approach.

And if there’s one topic owners whisper about in my Fix-It Sessions, it’s pricing.

They know their costs. They know what competitors charge. But value? That’s where the wheels fall off. Pricing becomes guesswork. Fear shows up wearing a spreadsheet. And .99 endings feel like safety blankets.

Let’s fix that today.

Why the Penny Story Matters for Your Business

The Treasury quietly announced the penny’s long fade from production. You’ll still see them rattling around in change jars for years, but the writing’s on the wall.

The moment I saw the headline, my brain jumped straight to charm pricing—that beloved .99 ending that’s shaped retail pricing psychology for decades.

It’s cheap. It’s familiar. It signals “deal.”

But the penny disappearing forces a simple question: If the penny doesn’t matter anymore, do price endings matter?

Yes. And the reason comes straight from pricing strategy expert Rafi Mohammed, whose research on consumer psychology shaped much of what we know about how numbers feel to buyers.

This isn’t about the physical penny.

It’s about how numbers feel to your customers.

And once you understand that piece, pricing becomes something you control—not something you fear.

What Price Endings Are Really Doing

Charm pricing (.99) is popular for a reason.

Rafi Mohammed has written about its influence for years, especially for lower-priced goods with quick buying decisions. It works for impulse purchases. It signals “value.” It encourages quick action. And it fits perfectly for retail, ecommerce, restaurants, and anything with low friction between browsing and buying.

But charm pricing weakens higher-value offers.

A coach charging $1,997 for a six-month program. A consultant charging for work at $2,499. A designer offering brand packages at $3,995.

These don’t signal “deal.”

They signal “mass market.” Like you walked into a warehouse club and found coaching on sale next to the bulk toilet paper.

That’s not the message you want when trust drives the sale.

The lesson here is simple.

Charm pricing helps low-friction products. Clean numbers strengthen high-trust offers.

And now that the penny is fading, this is the ideal moment to rethink your price endings—and the strategy behind them.

Other Pricing Psychology Factors Worth Knowing

You already learned about left-digit bias and charm pricing, but there are a few other behavior patterns that shape how people react to numbers:

• The compromise effect.
  When you present three price options, most people pick the middle one. This is why good-better-best pricing works so well.
• Price thresholds.
  Buyers have invisible “jump points” where a price moves from one mental category to another. Moving from $199 to $249 feels big. Moving from $249 to $279 feels smaller. Keep these thresholds in mind when adjusting your numbers.
• Bundle preference.
  People feel less resistance when offers are bundled. The value is easier to understand, and the comparison math disappears.
• Round number trust.
  Premium buyers lean toward round numbers because rounded prices feel steady and confident, especially for services and long-term relationships.

These patterns help you shape prices in a way that feels natural to buyers. The more you understand how people make decisions, the easier your pricing conversations become.

Pricing Is a Value Story

Here’s something I repeat in every pricing conversation: Pricing is a value story, not a math formula.

Most owners focus on expenses, margins, and competitor prices. All important. But none of these explain value to your customer.

Value is measured through one question.

What does it cost your customer to leave this problem unsolved?

That’s the Sandler-style “hang dollars on the problem” approach, and it applies everywhere. A consultant who saves a team 10 hours a week isn’t selling hours—they’re selling 520 hours a year back into the business. A retail shop selling organization products isn’t selling bins—they’re selling the end of clutter stress and wasted mornings hunting for keys.

Once you understand the cost of ignoring the problem, your pricing strategy for small business becomes grounded and confident.

Rafi Mohammed supports this with his value-based pricing research. He argues that prices should reflect outcomes—not hours, effort, or competitive averages.

Let’s turn that idea into something you can use this week.

Pricing Strategy for Small Business in Four Steps

Here’s the clean four-step method I walk clients through in Fix-It Sessions. No spreadsheets. No stress. No MBA required.

Step 1: Define Your Cost Floor

This is the lowest price you can charge and still keep the lights on. It includes cost of goods, labor, overhead, tools, and time. This number is your safety net, not your strategy.

Step 2: Identify the Competitor Range

Look at the market. Not to copy it—to understand the landscape. Competitor pricing tells you where your offer fits, whether you’re underpricing by accident, and whether there’s a gap you can fill. This builds context, not rules.

Step 3: Measure the Cost of Not Solving the Problem

This is where value takes shape.

Ask yourself: What’s the financial impact of waiting? How much time does this problem drain every week? What mistakes does it create? What stress does it cause?

This is the heart of your pricing strategy. The bigger the cost of inaction, the more valuable your solution becomes.

Step 4: Write Your Value Story

Your value story ties everything together. It connects your offer to relief, transformation, efficiency, confidence, revenue, or savings.

When you explain value clearly, your price stops feeling arbitrary. It feels fair, grounded, and defensible.

How to Choose Your Price Ending

Price endings aren’t random. They each send a different signal to your buyer’s brain.

When to Use .99

Perfect for retail, ecommerce, impulse purchases, and anything with quick decisions. It signals “value” and lowers the psychological barrier to buying. If someone’s scrolling and clicking, .99 helps.

When to Use .95

It feels rounded but still signals “deal.” Useful for mid-priced goods where you want a touch of charm pricing without going full retail mode.

When to Use .97

Retail shorthand for “manager markdown.” It’s a clear discount signal. Customers who know this code read it as “someone marked this down for me.”

When to Use Whole Numbers

Perfect for coaching, consulting, professional services, premium offers, B2B solutions, and any high-trust relationship. Round numbers signal confidence and clarity. They say, “I know what this is worth, and so will you.”

Your Pricing Reset Worksheet

This is your simple, fill-in-the-blanks pricing worksheet. Print it. Write on it. Use it for your top three offers this week.

Quick Example: How One Small Change Shifted an Entire Offer

A coach I worked with priced her sessions at $147 because it “felt fair” and matched the competition. When we walked her offer through the four steps, her thinking changed fast.

• Her cost floor came in at $40 per session.
• Her competitor range lived between $120 and $175.
• The cost of inaction for her clients landed around $1,200 a month in lost productivity and stalled progress.
• Her value story showed a clear reduction in overwhelm and a path to faster results.

By the end of the worksheet, she switched from single sessions to a $900 monthly package with a clean, round price. She booked two clients the same week because the new structure matched the value she delivered.

This is the clarity that shows up when you look past the number and focus on the story behind it.

Text Worksheet Version

You now have a simple way to review your pricing without stress or second-guessing. This worksheet gives you clarity on your numbers, the value you deliver, and the signals you want your prices to send. Keep it close and walk your top offers through it every quarter. You’ll stay confident, consistent, and in control.

Frequently Asked Questions

You’re working with the same process I guide owners through during Fix-It Sessions. If you want me to walk your offer through this worksheet and build a custom action plan for you, the Fix-It Session makes it painless and fast.