Today We Look At:
How Do Price Discounts And Promotions Influence Purchase Decisions?
In our ongoing Buy Button Series exploring the intricacies of the customer purchasing mindset, we turn our focus to the undeniable allure of price discounts and promotions. What makes a slashed price tag or a limited-time offer so captivating to the modern consumer?
At the foundation, it’s about perceived value. A study by Hawk Incentives found that 97% of consumers look for deals when they shop and 92% said they are always looking. This suggests a deeply ingrained desire for maximized value. When customers perceive they are getting more for their money, the brain’s reward system is triggered, reinforcing the decision to buy.
Another element at play is the psychological concept of loss aversion. Discounts often come with a time constraint, prompting a sense of urgency. Customers instinctively want to avoid the regret of missing out, making them more likely to act swiftly on a purchase.
However, the brain is also adept at detecting patterns. Overuse of promotions can lead to conditioning, where customers hold off purchases expecting future discounts. For marketers, the challenge is to wield promotions effectively, ensuring they spur purchases without compromising the perceived value of the brand.
Navigating the labyrinth of the consumer’s mind is no small feat. Yet, understanding the psychological triggers behind discounts can be a powerful tool in a marketer’s arsenal.
Here are some insights and stats on how price discounts and promotions influence purchase decisions:
- Consumers are more likely to purchase products that are on sale. According to a study by McKinsey & Company, 60% of consumers say they are more likely to purchase a product if it is on sale.
- Discounts can make products seem more valuable. When consumers see a product that is on sale, they often perceive it as being a better value, even if the discount is relatively small.
- Promotions can create a sense of urgency. When consumers see a promotion that is only available for a limited time, they are more likely to purchase the product immediately, even if they hadn’t planned on buying it before.
- Discounts and promotions can be effective in attracting new customers. A study by Nielsen found that 67% of consumers have tried a new product because it was on sale.
Here are a few tips for using price discounts and promotions to influence the customer purchasing mindset:
- Use discounts and promotions to create a sense of urgency. This can be done by offering limited-time discounts or promotions that are only available while supplies last.
- Use discounts and promotions to make products seem more affordable. This can be done by offering discounts on popular products or by offering discounts to loyal customers.
- Use discounts and promotions to attract new customers. This can be done by offering discounts on new products or by offering discounts to customers who sign up for your email list.
Hawk Incentives. (2018). The Deal-Seeker Study.
Tversky, A., & Kahneman, D. (1991). Loss Aversion in Riskless Choice. The Quarterly Journal of Economics, 106(4), 1039–1061.