[Pricing Nugget #047] Discounts: Add Some Surprise & Novelty

You are about to launch a promotion: “Get 40% off.“

Your working student gets by and says: “Hey, why not frame the promotion as ‘Pay 60%’?”

You shake your head in disbelief and say: “We've never done this before.”

And your working student replies: “You get my point?”

Maybe she is right. We will find out today.

“Get 40% off” or ”Pay 60%”? 

What should you do?

It depends on how novel or uncommon each promotional frame is.

Because if you surprise your customers with a novel or uncommon promotional frame, you grab their attention.

And if you grab their attention, they more elaboratively process the information you give them. They look closer at your promotion, and they will perceive the savings as higher because they invest more of their scarce mental resources in processing and trying to understand your campaign.

And what does it mean if they perceive greater perceived savings?

They exhibit a higher purchase likelihood. If we compare these two promotional frames, "Get 40% off" or "Pay 60%," let us look at two destinations where either frame is more or less common.

For example, in the US. "Get 40% off" is the most prominent promotional frame. Hence, if you frame it as "Pay 60%," the purchase likelihood increases because you chose a novel promotional presentation.

However, in Hong Kong, "paying 60%" is more common. If you frame it as "Get 40% off," this promotional frame is novel and uncommon, and it increases the purchase likelihood in Hong Kong.

What did we learn today?

If you surprise your customers with a novel discount frame, for example, they pay you back with their attention. In this case, grabbing their attention increases the perceived savings because they spend more time trying to understand what you are offering to them.

Hopefully, this piece of insight gets you out of the box and lets you think about how to surprise your customers in a way that you grab their attention but do not confuse them.