Sales Tips to Psychologically Stimulate…

Sales Tips to Psychologically Stimulate Consumption

Increase your sales during the upcoming tax season with discount.

Tax return season in every spring puts extra income to consumer’s pocket in the form of tax refund. Extra income makes consumers more eager to spend. This is indeed the busiest season for beauty supplies. Valentine’s Day, Easter, Mother’s Day, and prom days are all lined up in this season. As such, retailers run various kinds of sales events during a tax season.

Which discount strategy would bring the highest return? 5% discount? 10%? One of the toughest decisions retailers make is the rate of discount. In reality, discount rates are going up as the competition between retail stores are getting fierce. Nowadays, 10% discount is not even called a sales event; most retail stores set rates higher than 20%. Once a discount rate for a specific good is set based on corresponding inventory and profit margin, you need to think about how to deliver the message to a potential buyer.


How would you phrase a discount rate? 

A study in consumer psychology suggests that you might increase consumer’s desire to purchase by using varying phrases that work better with a certain discount rate. In this study, three different expressions of the same 10%, 20%, or 30% discount were used, namely (1) number % OFF, (2) $ amount OFF, and (3) UP TO $ amount OFF. Then, they collected the data on consumer’s purchase intent. According to the study, a certain phrase for a specific discount rate worked better in raising consumer’s awareness and stimulating purchase desire which can eventually increase sales. Let’s find out what the study says about which phrases worked best for each discount rate.


  1. 10% Discount

According to marketing experts, 10% discount actually makes a negative impact on sales. When the discount rate is so low, it works better to express the discount in terms of dollar amount than percent rate. For example, if your discount rate is below 10%, you might generate more sales by using phrases like $3 off, $5 off, or $10 off. The impact of sales for 10% discount was in the following order for different phrases.

$** OFF > UP TO $** OFF > 10% OFF


  1. 20% Discount

When the discount rate is 20%, the number percent phrase, e.g. 20% OFF, had a better result than dollar amount.

20% OFF > UP TO $** OFF > $** OFF


  1. 30% Discount

When you have 30% sales, you want to have it phrased in terms of “up to” dollar amount like UP TO $10 OFF or UP TO $20 OFF.

UP TO $** OFF > $** OFF > **% OFF

Tip for 50% discount

“Buy One Get One” vs. “50% OFF”

In terms of reducing inventory, sellers prefer Buy One Get One (“BOGO”). However, when it comes to consumers’ perception of discount, 50% OFF provides more satisfaction because consumers often reluctantly purchase more than they actually need to get a BOGO deal. Hence, BOGO is certainly not as good as 50% off. Unless it is all about inventory reduction, 50% OFF can be a better sales strategy in a long term to secure return customers while reducing inventory to some extent.

BNB Magazine JAN 2020 ©