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#626 - Richard Shotton - 8 Psychology Hacks Behind The World’s Biggest Businesses
Modern Wisdom
The Power of Perception in Discounts and Marketing
The size of a discount and how it is presented can greatly impact people's perception of a deal. A study showed that when presented with a pack of balloons priced at 48 pesos, people preferred a 25% discount over a 12 peso discount, even though they are mathematically the same. However, when shown a jacket priced at 480 pesos, people rated a 120 peso discount as a better deal than a 25% discount. This suggests that people react to the size of the number rather than what the number represents. According to Jonah Berger, if a product costs more than 100 pounds or euros, marketers should talk about the absolute discount, while for products costing less than 100, the percentage discount should be emphasized. This taps into the perception of value and can influence consumer behavior.
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