Introduction
What if you can buy your favourite watch at a flat 20% discount? You would probably try to purchase it as soon as possible before it gets sold out. That is the power of discounts that result in an item being sold in huge quantities within a short period. Every marketing tool is essential in this cut-throat competition between businesses and brands. This article will discuss discounts and their effect on human psychology.
A discount, be it in online shopping stores or physical shopping malls, can impact the perception of the product's value. Innovative brands use this to add a feather to their cap regarding revenue generation. This is a simple yet immensely powerful technique that you can use to see instant results.
Studies on Psychological Effects of Discounts
Research shows that a hormone named oxytocin, responsible for feeling a wave of happiness, increases when people get discounts. All this alone decreases stress and stabilizes a regular heart rate. A small gift after a discount coupon will also spike customer positivity and increase loyalty and engagement.
The effect of discounts on psychology is so strong that it can make people buy things instantly. For instance, a survey showed that 67% of the customers chose to purchase a product they did not plan by looking at a discount offer. Surprisingly, around 69% of millennials do not make any purchases until they search for discount offers first.
Why Are People Attracted Towards Discounts?
Let’s talk about why discounts are perfect bait for businesses and brands to attract more customers for increased sales.
1] FOMO
The Fear of Missing Out (FOMO) is an interesting aspect of discounts. This feeling is triggered when customers see a time-limited discount offer. It creates a sense of scarcity and urgency. Because of this, people tend to make quick decisions to avail themselves of the discount.
2] The Desire to Enjoy Saving Money
When people see a higher crossed-out price and a discounted one, they respond emotionally to buy that product. They do so to save money. Not only does this increase customer satisfaction, but it also creates a loyalty loop from which businesses can earn a lot. This creates a leading customer engagement, too.
3] They Perceive the Product as More Valuable
A simple crossed-out price tag can make people perceive the products differently. Because of the psychological anchoring, the customers tend to use the crossed-out price for comparison. They compare the old value with the newly discounted one.
Tips on Giving Discounts
With the following tips, you can maximize the benefits that you can take from discounts.
1] Not Every Product Needs a Discount
Yes, it is true. The reason is that discounts have an impact on the perceived value of a product. For instance, a 20% discount on clothing attracts a considerable crowd to your shop, but the opposite happens for luxurious items. A discount on a gold-plated Rolex watch would not be a good idea because people will see it as something whose value has been decreased.
The general rule of thumb is to avoid discounts on luxurious items. Discounts on luxury items make them inferior because the potential buyers are from the elite class. A study has shown that such discounts make the products less valuable.
2] Use Simple Math
The extensive use of calculators has become a massive hurdle in making our brains fast with math. For instance, if the selling price was INR 50 and you wrote a discounted price as INR 40, people can quickly see a difference of INR 10.
However, bringing the price from 45.82 to 36.31 INR is not a good idea because no one is good with that math. That is why you should keep your price tags and discounts that are easy to evaluate.
3] End Your Prices With 99
You might have noticed that this little trick is effective and can attract some people to buy the product. A price tag of INR 299 is approximately equal to INR 300. However, the customers use the numbers before the decimal point for comparison.
Another aspect of this trick is that the number 29 gets the main focus of sight and thinking. Therefore, you should use that strategy often at regular and discounted prices.
4] Free Shipping
You do not always have to discount the product’s price. What you can do is provide free delivery. This discount is indeed valid for online purchasers, but this also ensures that you do not lose the value of products being perceived by the public.
Conclusion
This article has not just explained the effect of discounts on customers’ psychology; it also gives you valuable tips to implement such strategies. If that strategy-making seems difficult or you want professionals to guide you on this for maximum results, then ZoopUp is the solution.
An expert in such strategy-making techniques for marketing can get you what you want in no time. Our professional strategists can help you maximize the sales of your products and convert more prospects into loyal customers.
FAQs
1] Can I implement all tips together for maximum results?
Don’t use all the tips at once. You need to maintain a high perceived value among your consumers and prospects for a successful brand and brand recognition. You should not make your brand perceived as something associated with low-rate products and cheap deals.
2] Does font size have any impact on the psychology of customers?
It may sound illogical, but this is how psychology plays a role. Research has shown that people feel they have saved a considerable amount of money when they have a discounted price with a bigger font.
3] What could be other discount strategies?
Other discount strategies could be providing discount coupons for first-time visitors to your shop or online store. Plus, you can use opt-in offers, which are mostly used via emails. Additionally, you can provide celebrity discounts or frequency-visitor discounts for constant customer engagement.
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