Deals and discounts - what’s the point?

It’s true. We love a good deal at Treat NZ, And from our recent survey, it looks like most people do! Deal culture and pricing psychology is quite an interesting topic, so without further ado, let’s have a little look at what goes on when we see deals advertised!

Even in a world that is so saturated with ads, deals and promos, they still grab our attention. After all, who doesn’t love saving money? That part’s simple, however there are some easy but strict rules as being too pushy or ‘salesy’ will have the opposite effect on potential customers. 

A recent study proves that finding a good deal can actually reduce stress and make you, on average, 11% happier! How good! This is because the “feel good hormone”, oxytocin, is released when you believe you’ve found a bargain or good deal. And this spike in happiness increases with the greater the deal/discount. 

So by offering a good deal, you’re generating happy customers but also, giving customers agency to purchase/convert, when they might have been previously on the fence. And as we say at Treat NZ, having some bums on seats with a little promo is better than none; no one likes no customers!

Here’s some more crazy stats about the effect of discounting:

Surveys done by the coupon marketplace RetailMeNot found the following:

1. Nearly 70% of millennials will look for a deal before making a purchase.
2. Two-thirds of people say they’d make a purchase if they had a coupon, regardless of whether they initially planned to buy something.
3. 80% admit they’d try a new brand if it offered them a discount.
4. 48% of people will steer clear of brands that don’t offer deals

These are some amazing statistics, that hopefully show business owners, it’s not just ‘bargain hunters’ who use deals, it’s everyone. And this will have a positive impact on your business.

Ok, so we’ve converted you to offer some deals and specials and you want to know the next steps. Here are 3 top tips about creating your deals: 

1. Stick to the rule of 100:
   Jonah Berger, marketing professor and author of Contagious: Why Things Catch On, tested how people perceive a percentage discount versus a dollar-off discount promotion. And through his work, Berger developed “The Rule of 100.”

According to his research:

• A percentage discount is more appealing to consumers for items under $100. So 10% off a $50 sweater sounds better to buyers than giving them $5 off, even if they’re the same discount.
• A dollar-off discount works better for items priced over $100. On a $1,000 computer, people were more likely to buy when they received $200 off versus a 20% discount, despite the deal being the same.

• Flash sales create a sense of urgency. Buyers know deals will only be available for a limited time, which means they need to take action right away instead of waiting. If they don’t, they’ll have to pay full price later as a result.
• Low-stock or limited-inventory sales create a scarcity mindset. If people know something they’re eyeing is about to run out, they’ll be more likely to buy it before it’s too late and gone forever.
  
  

When done correctly, discounts will have an incredibly profitable and positive effect on your business! Drawing in new customers, bringing in repeat customers, creating a buzz around your business for what’s going on, generating happy customers and customers are more likely to buy more with a deal too!