Do Percentages Sell Much better than Dollar Amounts?

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Perhaps you have ever wondered if its easier to give a discount predicated on the dollar-amount off the most common price (e.g., $50 off), or a share off (e.g., 30% off)? Which gets an improved response?

You want your offer to sound as irresistible as possible, and you’ll think you know how exactly to do this, but sometimes what sort of mind processes data doesn’t maximize logical sense.

I made a decision to execute a little research to see if anyone has put the problem of dollars off vs. percent off to the scientific test. Surprisingly, there wasn’t much out there but other people’s opinions, aside from one study from 2008 that concerned a patio gear company that did a contact campaign to existing customers. The ads were the same except that one offered 15% off the full total sale, as the other offered $50 off.

The results of the test were quite clear. The $50 off coupon generated 170% more revenue compared to the 15% off coupon, and its own conversion rate was 72% higher. Interestingly, however, with subject lines that clearly stated the offer as either 15% off or $50 off, the open rates and click-through rates were just about the same for both versions. Which means that individuals were opening both emails, but responding easier to the $50 off coupon.

The authors of the analysis believed the $50 off coupon was of higher perceived value. In addition they surmised that the $50 off did better since it didn’t require buyers to accomplish any math. They saw immediately what their discount was and it sounded good to them.

Through the years I’ve seen each method (percent off vs. dollars off) outperform the other predicated on several other factors.

Generally, the offer that sounds higher may be the one which does best. So, if the dollar amount is $50 off, and that’s in comparison to a discount of 10% off – or, as regarding the example from the outdoor gear company, 15% off – I’d expect the $50 off to obtain a bigger response. It just appears like additional money.

It could not have anything regarding which option would actually result in a bigger savings. A lot of people may not even do the math. What counts to them is their initial impression of what appears like much.

Also, remember that the actual cost of that will often enter into play, determining what size these numbers are and how they’ll compare. Showing you why, let’s look at a few examples that can provide you ideas.

Let’s say your product is something fairly inexpensive, just like a supplement that regularly sells for $25 for a bottle which has a one-month supply. I’d predict an offer for 40% off would do superior to an offer of $10 off, despite the fact that the actual value of both offers is equivalent.

For a far more expensive product, perhaps a bit of workout equipment that normally sells for $350, I’d predict an offer of $50 off would do much better than offer of 15% off – despite the fact that the 15% offer is really slightly better. The $50 offer appears like a large amount of money. And for many people, figuring what 15% of $350 is might seem like an excessive amount of work.

But again, you’re coping with a psychological problem of people’s perceptions. If you’re really worried about which approach provides the very best result, there’s no replacement for testing. Focus on an A/B split on a smaller segment of your list, and see what results you get before selecting the give you use when you roll out to a more substantial

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