How much of a discount does it take to entice some one?

[Desk Jockey]

How much of a discount does it take to entice some one to action?

When you are considering purchasing an item what does it take to get you off the fence?

At what point does the deal become too good and you do not trust the discount? Or the discount appears fictitious like the rebates auto dealers run or tire discounts that run continuous?

This is not for any actual project so there is no right or wrong, I'm only wanting your opinion or experience.

I know we are cautious about going too far and giving to much. To us it seems to de-value the service when you discount too much or give away too much. Nonprofits and charities would be an exception.

What do you think?

 

[Mardie]

As a consumer my first responce to a discount is to look at it and wonder. If it is a product i figure it must be a clearout for the next best thing to take its place. If it is a service i see getting less value on the discount than i would paying the full price.I would never have anything to do with a discount on a service.

I learned this lesson in my early 20s and came up with a saying and it goes like this.


If i try to save money,it will end up costing me twice as much.
If i try to take a short cut it will take me twice as long to get their.

 

[Desk Jockey]

I feel the same way, I always question "why" why are they offering this to me.

I'm not much of coupon clipper but I did use some Bed Bath & Beyond discounts at Christmas that I would not have normally gone there.

AND yet we offer seasonal discounts, Chavez Bucks at Home Shows, Discount cards to our clients with luke warm results. LOL

 

[Ron Werner]

For me, doesnt matter what the discount is IF I am not looking for that particular product or service. Could be 75% off but if I don't want it or need it, I won't go after it. I have seen some things at a really good deal but I didn't have the money anyway, so I couldn't take advantage of it.
So first, its finding the people that are looking for our service, which is always the Holy Grail, finding that target market that is willing to GO NOW.
Then, perhaps its not so much the "offer" as it is Why you are offering. Joe Polish promotes 1 Free Room. It is a legit free room and the reason is to show off what we do...with the "hope" that they will be SO impressed they will want the rest of the house cleaned.
Promoting a 20% off, or $50 off deal, give them a good reason why.

For me, 10% isn't even getting it tax free.
20% would be a good savings and I start looking more. Anything above that gets a "look".
For a $ amount, it would have to be in context of the real price. ie, in the grocery store, 50cents off a $5 item, not bad, but off a $2 item, a better deal,
The bigger the real price, the bigger the $ amount would need to be.

This is a great question to ponder.

 

[J Scott W]

I am a coupon clipper. a 10% discount would get my attention and would be used if it was an item I was already planning to purchase anyway. I would go to store A instead of buying at store B without the discount.

If the discount is greater than 20%, I wonder if this is a "loss leader" just meant to bring customers into a store with the hope they will buy something else or is it clear out of old merchandise or such.

If the purchase was something I had not thought about buying, the discount better be 50% or more. For example a restaurant that has a buy one get one meal might get me to try a place I had never eaten before.

 

[Desk Jockey]

Does Free scare you? It does me.

If it has value shouldn't it cost something, I don't trust FREE, not much anyway.

 

[Ron Werner]

thats why it needs an explanation of why its free, and an ethical person that wont corrupt it

 

[The Great Oz]

My dad always said, "Discount off of what?" I don't care what the discount is without a bottom line price. The thing we've noticed is that percentages really don't work very well at all, because the smartest people in the world are too lazy to do the math. Give them $15 off and they'll bite more often than giving them 15% off, even if the $15 would be 6%.

I read somewhere that customer surveys showed that potential customers stopped believing in any discount above 15% on a service anyway. After that they suspected dishonesty - the "retail" price was inflated to make the discount look better. The franchises that advertise 30/40/50% off can't get their phones to ring when they aren't running a "special" so I guess everyone knows this.

Discounts on merchandise can typically be larger because the margin is typically higher.

 

[Desk Jockey]

Thanks Bryan, as usual great information.

Much appreciated!!!

 

[davegillfishing]

Richard our sweet spot is 15%. Anything more and we get a little less quality response at 10% its ok but not near as hot as 15%

 

[Steve Toburen]

Richard our sweet spot is 15%. Anything more and we get a little less quality response at 10% its ok but not near as hot as 15%

That is interesting, Dave. I read years ago that a customer's "perception of value" goes up dramatically from 10% to 15%. 10%? Meh. 15%- bingo! That's what "they" say, anyway.

Steve

PS With services I would be tempted to include something free instead of a discount. Like Bryan says people are too busy/lazy/math challenged today too calculate percentages off.

 

[davegillfishing]

I agree Steve but people's thoughts are "nothing is free". They will just jack the price somewhere else.

A 15% discount just sounds like a lot to people but free sounds like strings attached

 

[Doug Cox]

The internet can pretty much tell you a fair price for a certain product In respect to customers inquiring about purchasing or not purchasing my service, I've seen people NOT call me over a 10 dollar difference. Pretty sad, especially if they are a referral.

 

[TomKing]

We have found 15% to 20% work well.
We also use gift cards for $50 off

10% is easy to give not a deal
15% you see every day
20-25% seems like you are sharing some profit with me.

I do think offers with a dollar value seem to have more value.

When we give away $50 our average job is close to $300 so we are giving away less than 20% disccount.

 

[Dan]

10% or better. Anything else is just a joke as far as I'm concerned.