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The Surprising Tactic That Works Better Than a Discount

Monday, August 4th, 2014

If you offer a 25% discount on toilet paper, you would expect to get a bump in sales. But aside from offering abiggerdiscount, how could you do better?The obvious process is to ask shoppers directly what would increase their purchase intent. So we did.

In an online survey of 4,500 people, we found that 3 out of 4 shoppers ranked a 25% discount as the #1 most persuasive tactic at shelf. Other tactics that leveraged psychological principles didn’t test nearly as well in a direct survey of purchase intent. (We didn’t label the types of tactics, here in brackets, during the research.)

We asked directly about that fourth-ranked tactic: the purchase limit. Two out of three shoppers (68%) believed itwouldn’t influence them at all. (Interestingly, 27% said it would indeed make them buy more TP.).

But as Robert Cialdini has shown, the psychology of persuasion is often unconscious. So we’re grateful that Brainjuicer did this study in the real world.In a recent webinar called Frame and Fortune, they showed that a 25% discount on TP indeed yielded a 34% lift in sales.

But when they used the same yellow price tag to announce “maximum 8 units per customer” — at the original price— they got a whopping 85% lift in sales. In other words, perceivedscarcity was twice as effective as a price discountin driving short-term sales. (Not even real scarcity!)

They wisely caveat the results: it won’t work for all products or all circumstances. Still, combining their research and ours leads to two morals for shopper science:

  • Unconscious psychological levers — even irrational ones — can be amazingly effective at influencing shoppers byincreasing the perceived valueof a product (a discount decreases it).
  • The right levers to use willrarely be revealed by asking people directlywhat influences them.

This is the second time we’ve found this mismatch between what peoplesaywill influence their shopping and what they actuallydo.The first time was last year with shopping cart dividers and fresh produce.

Students of shopper psychology or behavioral economics won’t be surpirsed by these results. But many marketers, afraid to leave the numerical safety and convenience of stated purchase intent, are clearly leaving money on the table.

– With Casey Schoelen

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