What will have the most impact on the client? Price reduction by 25%? Or "giving 50% more bonuses"? Functionally, both offers represent the same discount level, subject to partial settlement in bonuses for future purchases. However, researchers at the University of Minnesota found that the product with the "50% cashback" offer sold 71% more than the "35% discount", although the second option is more profitable for the consumer.
Our brains are poor at math
Mathematics is difficult. Both male and female brains are not very good at automatically detecting which trade is better, which explains why 50% looks more attractive than 35%, even if mathematically it is actually worse. Researchers call this "base value neglect." Basically, we look at the percentage without paying attention to the number to which it refers.
Increase your percentage
From this we conclude: we should always try to build a promotion using the highest percentage that we can afford. Phrases like “70% more bonuses” and “settle 100% of your bonuses” can have the added benefit of driving sales. The study also notes that the value of cumulative discounts and bonuses is overestimated by consumers. And this must be used when formulating a proposal.
In my practice, I always strive to reorient the companies with which we cooperate from a discount incentive system to a progressive accumulative bonus system. This approach gives more opportunities to offer maximum interest (70-90%), which we can not often give in discounts, and on the other hand, it will always stimulate the client to repeat purchases in order to calculate the bonuses accumulated by him. The progressive system has a mutual benefit - the trajectory of improving his privileges and increasing personal discounts is visible for the buyer when certain budgets of funds spent are accumulated. And for you it is an additional tool for building commitment and stimulating future sales. With each purchase, the client comes closer to the offers that are more profitable for him, and you can individually spur his motivation by giving additional bonuses. So, if your client is "lost" for some time, you can always return him by sending a message about how many bonuses he has on his account and what you will give as a gift if he comes to you for purchases before such -that numbers. By the way, the accumulated bonuses, which are added to the general discounts, have a stunning effect in terms of stimulating spontaneous purchases, since the client thinks that he has got to a super sale. In fact, he will buy more than he planned, once again accumulate bonuses and return to us for new purchases.
And don't forget the power of the free!
Even more than discounts and bonuses, we love the word “free!”. It is a significant motivator for consumers. Instead of “50% Bonus” or “50% More”, use “50% Free!” To maximize your sales. In short, combine the highest percentages with the word “free,” and you sell far more than the equivalent discount. Always remember that we are all irrational, do not like to count and love freebies.