Seduced By A Great Deal…Until I Did The Math
Fifty miles to empty. The indicator flashed on the dashboard of my car. I swear that indicator looks meaner the closer you get to zero.
Maybe I should wait until Sunday to fill up.
Let me just get it out of the way today.
Those two thoughts wrestled with each other in my brain. What good would it do to wait until Sunday? One of the gas stations near me offers a five cent gallon discount on Sunday. How could I pass up a discount?
I stopped to think about it for a minute. I did the math.
My car holds fourteen gallons. At most I would save seventy cents. When would I ever drive out of my way or delay a purchase to save seventy cents? Never. There’s no scenario where that would make sense to me.
So, why am I now considering it?
That’s the lure of discounts. They screw with our brains. They spur snap judgments. We act in ways that are not always rational.
There’s several mechanisms at play in our brain when we see a discount. We don’t need to understand everything at play. We only need to know that it makes us salivate like caged dogs.
The Lure Of A Good Deal
Everyone knows that retailers jack up prices and then offer a discount. That doesn’t stop us from planning our purchase around discounts. The lure of a good deal excites us.
Even if there’s no real savings from a discount, it’s a win-win for the retailer and consumer. The retailer gets the business. The consumer walks away feeling like he got the better end of the deal.
Pride takes over. The consumer boasts about the great deal he got. He now possesses privileged information. He then encourages friends to exploit the same deal. Then one or more of his friends visits the retailer and they get more business.
You could argue that if you just stop and do the math then these discounts often lose their power. True. The problem is we fail stop and do the math, except for large purchases.
Creating The Killer Deal
Now that we understand the power of a good deal, how do you make them work? Follow these three points to offer a compelling discount:
- Add a time limit. Without an expiration there’s no urgency. Without urgency there’s no compelling reason to take advantage of your discount.
- Don’t cheat. Mass market retailers can raise prices on commodity items without anyone knowing. If you consistently advertise one price and then raise your price when you add a discount, you’ll get caught. You lose credibility. Be fair with your customers.
- Mix it up. Avoid repeating the same deal. It lessens the urgency as your customers will expect to see it again. A big name window company sends me a forty percent off offer the second week of every month. There’s no urgency for me to use it. I know they’ll send me the same thing next month. Meanwhile, it’s been two years since I received my first deal in the mail . I still need to replace my windows.