Monday, July 2, 2012

Persuading buyers with number psychology

We're in the season of mid-year sales, so here are a couple of pointers about representing discounts and prices to maximise your conversion.

1. How to best represent a discount range
Many businesses offer a range of discounts depending on the stock. Some might be marked down by 20%, others 50%, so is it better to say "20% to 50% off" or "up to 50% off"?

Here are a couple of examples from the local paper. Advertiser 1 is communicating the discount range whereas Advertiser 2 is using the upper limit only.
Advertiser 1 Range of dicsounts

Advertiser 2 Upper Discount only

According to Dr Flint McGlaughlin from Marketing Experiments, people tend to assume the first number represents the most common discount, so in the case of Advertiser 1, most people would believe that the majority of rugs are 25% off.  You are therefore better to follow Advertiser 2's technique and go with "up to xx% off".

2. Use decimals to elongate or diminish the number
To make a number look bigger, add decimals. To diminish the number, round off.

Sometimes you want the number to look big, for instance when offering a cash prize or promoting the amount of money you have donated.  Take an example from Advertiser 3 below who is touting a cash prize and therefore has added decimals to elongate the number, and compare it with Advertiser 4 who missed the opportunity and instead rounded the amount they have donated to the community.

Advertiser 3 Added decimals
Advertiser 4 Rounded number

When you want the number to look smaller, try rounding.  Flip through a real estate section to see examples like Advertiser 5 who has diminished the price and contrast this with Advertiser 6 who has not.  And finally, learn from Advertiser 7 who missed the chance to make the price seem small by adding unnecessary decimals, elongating the number.  Representing the price as $139 would have been more effective.
Advertiser 5 Rounded  number
Advertiser 6 Unrounded number

Advertiser 7 Added decimals

There are examples all around you of how numbers and discounts have been communicated.  Whilst we're only scratched the surface in this post, the lesson is that you cannot take the decision about how to represent a number for granted because it will have a significant impact on buying behaviour.  Be smart about your choices and you will maximise your marketing conversion.

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