Percent Off vs. Dollar Discounts: The Psychology of Promotions

Q: Is a 20% off promotion better than a $5 off promotion?

For the $20 product, I would predict that a 20% Off promotion would perform better than a $5 Off promotion even though the absolute dollar offer has additional dollar savings for the customer. However, similar to our $350 couch example, the opposite can be true about a promotion on a product over $100.

Q: Is percent off better than dollars off?

Each method (percent off vs. dollars off) can outperform the other given the right circumstances. Marketing Professor, Dr. Jonah Berger offers an easy way to remember to consider psychological perceptions in what he calls The Rule of 100. This rule states that for products or services over $100, a dollar discount will be more effective.

Q: What is the percentage discount on a reference price?

Experiments 2 and 3 helped generalize these findings across different reference prices (regular price $350 or $150, discount amount $105 or $45, percentage discount always 30%), as well as two levels of savings off the same reference price (regular price $1,450, discount amount $145 or $435, percentage discount 10% or 30%).

Q: Is amount off better than percentage off for higher price levels?

Experiment 2 confirms that this result (amount off is better than percentage off) generalizes across higher price levels, and Experiment 3 demonstrates that the result (amount off is better than percentage off for higher-priced products) generalizes across discount levels.

It doesn’t matter how great an offer is if customers don’t use it. In order to entice consumers to use coupons or discounts, marketers need to create promotions that will appeal to the consumer and persuade them to buy. There are a number of marketing techniques that will make offers more persuasive … See more

20%
OFF

PERCENT OFF VS. PRICE DISCOUNTS: THE PSYCHOLOGY OF …

1 week from now

Jun 26, 2024 · Percent Off Promotions. Percent off promotions offer a discount as a percentage of the original price. For example, a 20% discount on a $50 product means the customer pays …

linkedin.com

$100
OFF

Amount Off Versus Percentage Off—when Does It Matter?

1 week from now

Mar 1, 2016 · For lower-priced products (less than $100), the absolute number associated with the dollar amount off discount will be less than the absolute number associated with the …

sciencedirect.com

10%
OFF

Amount Off Versus Percentage Off—when Does It Matter?

1 week from now

Mar 1, 2016 · A 10% discount likely anchors around 10 because customers do not calculate the actual discount amount. If a product is higher priced (over $100), the percentage discount may …

sciencedirect.com

50%
OFF

Dollar-Off Or Percent-Off? Discount Framing, Construal Levels, …

1 week from now

Building on construal level theory, Study 1 shows how dollar-off discount framings (“Buy 2, get $10 off”) trigger low-level construal, while percent-off discount framings (“Buy 2, Get 50% off”) …

bryant.edu

50%
OFF

Leveraging The Psychology Of Discounts To Make More Money

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Apr 9, 2024 · A $35 pair of sunglasses, marked down from $50. Buy one shirt for $60, get the second for 50% off. If you selected B, congratulations—you’ve successfully maneuvered …

volusion.com

€100
OFF

The Rule Of 100: The Psychology Behind Special Offers And Sales

1 week from now

Aug 1, 2018 · So, in order to figure out which discount frame will seem larger to your customers, you should use the Rule of 100. If your product or service costs less than €100, the Rule of …

medium.com

25%
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Stimuli For The Dollars-off And The Percentage-off Conditions

1 week from now

In another research, through manipulating an attribute framing (percentage-off vs. dollar-off format for promotion, i.e., "$56.25[25%] off from the original price", see p.153), Choi and Mattila ...

researchgate.net

FAQs about Percent Off vs. Dollar Discounts: The Psychology of Promotions Coupon?

Is a percentage discount better than a dollar off promotion?

For those under $100, things reverse and a percentage discount will likely be more effective. For example, comparing the performance of a dollar off vs. percent off promotion on a $20 product may have a different result than similar promotions on the $350 couch described above. ...

What is a dollar off discount?

For lower-priced products (less than $100), the absolute number associated with the dollar amount off discount will be less than the absolute number associated with the equivalent percentage off discount (e.g., 10 from $10 off $50 < 20 from 20% off $50). ...

Is a 20% off promotion better than a $5 off promotion?

For the $20 product, I would predict that a 20% Off promotion would perform better than a $5 Off promotion even though the absolute dollar offer has additional dollar savings for the customer. However, similar to our $350 couch example, the opposite can be true about a promotion on a product over $100. ...

Is percent off better than dollars off?

Each method (percent off vs. dollars off) can outperform the other given the right circumstances. Marketing Professor, Dr. Jonah Berger offers an easy way to remember to consider psychological perceptions in what he calls The Rule of 100. This rule states that for products or services over $100, a dollar discount will be more effective. ...

What is the percentage discount on a reference price?

Experiments 2 and 3 helped generalize these findings across different reference prices (regular price $350 or $150, discount amount $105 or $45, percentage discount always 30%), as well as two levels of savings off the same reference price (regular price $1,450, discount amount $145 or $435, percentage discount 10% or 30%). ...

Is amount off better than percentage off for higher price levels?

Experiment 2 confirms that this result (amount off is better than percentage off) generalizes across higher price levels, and Experiment 3 demonstrates that the result (amount off is better than percentage off for higher-priced products) generalizes across discount levels. ...