Should discounts use $ off or % off?
Marketing Minute

Should discounts use $ off or % off?

If you want to make your discounts not just look good, but irresistible, here's a question for you: Should you give $ off or % off?

Should you give $ off or % off?

For example, for a $200 item should you offer "$40 off" or "20% off"?

The research tells us that it depends on the price of your product. If the product is over $100, go with the dollar amount. Under $100? Use the percentage for more impact.

Why does this work? 🤔

This works because people love discounts, but they love 'em even more when they feel like they're getting a steal. The feels are in the steals, for reals! (ok, I'll stop)

We're all a bit lazy when it comes to math. Seeing "$20 off" on a $200 item feels like a bigger win than doing the mental gymnastics to figure out what 10% means.

The deets

  • High-Priced Items: For stuff over $100, like for a $500 product, a dollar amount off (like $100 off) feels like a better deal than saying 20% off.
  • Low-Priced Items: For items under $100, percentages are king. A 50% off on a $20 item feels bigger than $10 off.

How you frame it is all about how it feels to the buyer - you gotta hit 'em right in the feels. Here are a few more examples:

Product Original Price Discount Type Discount Value
Designer Handbag $250 $ Off $50 Off
Budget Backpack $40 % Off 20% Off
High-end Laptop $1,200 $ Off $200 Off
Phone Case $15 % Off 30% Off
Kitchen Mixer $220 $ Off $40 Off
Coffee Mug $8 % Off 10% Off
Office Chair $150 $ Off $30 Off
E-book $20 % Off 25% Off

Remember, the idea is to match the type of discount with the product's price to maximize the perceived value of the discount. This should help you get more bang for your promotional buck.

What to watch out for

There are some things to be careful of. For example:

  • Currency matters: This research above was tested in USD ($) and pesos, but it should also work for euros, pounds, or Bitcoin (just kidding, not Bitcoin).
  • A caveat on stat sig: For low-priced items, the percentage-off effect wasn't statistically significant. So, if you're lazy (who isn't, amirite?), sticking to dollar amounts won't kill your sales.

Keeping these caveats in mind should help keep you on the right track.

Here's how to do it

  1. Price Check: Look at your product prices. Over $100? Use dollar discounts. Under $100? Use percentages.
  2. Consistency: If switching between $ and % is a logistical nightmare, just stick with dollar amounts. You won't lose too much.

So, go ahead, make your discounts feel like the deal of the century. Until next week, keep those sales rolling!

Want to learn more? 🤓

If you want to learn more about this topic, you can dig into the nerdy details in the original marketing study here.

Quote of the week 💬

"In marketing, perception is reality."

- Al Ries

About the author
Gabriel Mays, the Co-Founder and CEO of POPSMASH
Gabriel A. Mays
Gabriel Mays' Website
Co-Founder & CEO at POPSMASH
Before POPSMASH, Gabe was a Director at GoDaddy and founded two startups. He was also a Marine Corps Captain, serving in Iraq and Afghanistan. He lives with his wife and two kids on Cape Cod, MA.

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