A/B Testing Idea #116 - When price is below 100 ($,£,€) show discounts in percentage form rather than in absolute value
By displaying discounts in percentage rather than in value when product price is below 100 (£/$/€), you make your promotions seem as attractive as possible by altering the way you frame them. If the original price is less than $100 then it's better to show the reduction in terms of a percentage (eg. 25% off).
However, if it's higher than $100 then it's better to show it numerically (eg. $25 off). Although the discount offered will of course remain the same, it is the customer's perception of how large it is that can be affected. In each case, the numerical value attached to the discount will be the largest possible, which will of course bias the customer's perception of how large the discount itself is. They will automatically make a judgement based on the discounted figure shown rather than calculate what the actual final price of the product is.
For example, 10% off of $250 doesn't seem as interesting as $25 off, just as $3 off of $12 doesn't seem as interesting as 25% off.
In both cases, the discount itself is exactly the same but will be perceived as larger due to the magnitude of the discount value.
Inspired by Nick Kolenda
- Perceived Value Pricing (Lee & Zhao, 2014; Poundstone, 2010; Mazumdar; Raj; Sinha, 2005; Thomas; Simon; Kadiyali, 2007)
Perceived Value Pricing
Perceived Value Pricing explains how our perceptions of a price and its value can be altered depending on how it is presented to us.
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