Leveraging the Psychology Discounts in 2021

Leveraging the Psychology Discounts to Make More Money:

Everyone is attracted to a company, no matter how big or small it is. Including coupons and discounts in your overall marketing and pricing strategies will attract buyer attention. But by offering discounts to stay competitive regardless of customer behavior and the impact on your business, you can only reduce returns.

To take your strategy to the next level, you need to think about how your customers see discounts and promotions at higher levels. Read on to learn more about how customer behavior is affected by their willingness to offer discounts, as well as the most common types of discounts and how to make them work best for your business.

How discounts affect consumer behavior

Discounts not only follow the idea of   helping customers save money, but also influence the way consumers interact with your products and brand. Here are some ways lower prices can affect your customers and inventory:

discounts create happiness

In a simple and broad sense, saving money makes people happier, a concept supported by a Claremont Graduate University study conducted with Coupons.com. If you give your customers the opportunity to save more money than a product is worth, they will experience increased oxytocin levels. This, in turn, can create a positive association with your brand if customers remember it later, as they associate the positive feeling they have with your business.

Discounts assume consumers trust you

Consumers believe that any discount offered by a company is a legal reduction in the original price. In other words, you can technically increase the price of an item by 20%, roll back and offer 20% off, but consumers rarely consider the possibility. This perceived confidence in your company and the discounts it offers creates a sense of excitement about your offer. But be careful not to abuse your sense of confidence by making dubious offers to increase your profits.

Discounts reduce the propensity to buy

Studies show that offering a coupon or discount can deter consumers from looking for the same product elsewhere. This is because discounts have a sense of urgency to buy, which distracts the customer from looking for other options. The impact of disrupting third-party searches is especially important for the online business sector, where price comparisons are increasing due to the wide availability of competitors in the digital space.

Discounts create a sense of urgency

Discounts encourage customers to buy earlier. In part, this is due to the idea of   scarcity, where consumers understand that discounts cannot always be saved. In addition, Psychology Today emphasizes that “early remorse” (regret at the loss of the company) is also a big pressure factor when it comes to promotions. Urgency is an important element in pushing customers past the purchase limit and can be supported by specific text in your marketing communication.

Discounts available for your brand.

A disadvantage of coupons and discounts is that it teaches consumers to wait when they buy from you. This expectation often prevents customers from purchasing items at their company’s normal price and encourages them to get discounts from competitors. In the e-commerce industry, this expectation is increasingly true with free delivery offers. To avoid customers buying only at a discount, it’s advisable to be strategic about the type and timing of your discount campaigns.

The way discounts are offered changes the perceived value

The success of discounts often hinges on a common theme: Shoppers don’t like math. Instead of wasting numbers, they send specific numbers for discounts or promotions and draw their conclusions based on the value.

Consider this example: Which of the following is the largest discount without math?

Short TV from $ 200 to $ 999

2. $ 35 sunglasses, $ 50 off

Buy a shirt for $ 60 and get 50% off Monday

Congratulations, if you have chosen B, you will receive a short discount with short forms to get the best price. If you choose a different answer, don’t worry – most of your customers do the same. Indeed, marketers rely on this consumer behavior to drive sales.

Looking at option C, most consumers focus on the 50% discount rather than a basic calculation to see that they are really only saving 25% on their total purchase. It makes shoppers feel that they are getting a better price than what they are actually getting.

The main conclusion is that although the basic rule of economics predicts that consumers will act more rationally and safely, the way discounts are offered has a major impact on shopping behavior.

Different types of discounts

Now that you understand the effects of discounts on customer behavior, you may want to use it to your advantage. However, before trying any other tactics, familiarize yourself with the most common types of discounts, which are summarized below:

• Dollar or Percentage Discount: This standard discount type is the most commonly used and simply offers a discount off the original price, such as $ 25 or 20% off. This discount can be applied to specific products or to an entire order.

• BOGO: short for ‘Buy one, get one. This type of discount encourages customers to purchase additional items to qualify for the transaction. Examples of BOGO are “Buy one, get one free” or “Buy one and get 50% off the next item”.

• Less Discount: This discount encourages shoppers to increase their order value up to a certain limit to get a discount, for example: “Buy 4 items, get 5th free” or “Get 15% off your purchase when you spend $ 150 “.

Finally

Now that you understand better how discounts affect your specific audience, you can better plan your campaigns to increase sales and customer engagement. All it takes is a little bit of math and a greater appreciation for the powerful discounts your customers have in mind.

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