How right digits affect perception of discounts

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13 Responses to “How right digits affect perception of discounts”

  1. Logical Extremes says:

    Hopefully it’s apparent to most folks that the two scenarios aren’t equivalent either; the $11 is a higher percentage sale on the lower dollar amounts.

  2. Anonymous says:

    Their example is flawed. The 199$ item is 5.5% off while the 222$ item is only 5% off. You are getting a better deal on the 199$ item.

    Isn’t that what matters most?

  3. slawkenbergius says:

    Their example is flawed. The 199$ item is 5.5% off while the 222$ item is only 5% off. You are getting a better deal on the 199$ item.

    That’s kind of true. A discount of $11 is the same no matter what the original price. But yeah, the reduction is bigger, and therefore probably a better deal.

  4. Belgand says:

    Part of it has to do with the way items are normally priced. Typically items are priced either at whole value (e.g. $200) or just barely below it. This causes you to view an item discounted to a smaller right-hand number to appear to have been discounted more through association whereas a higher digit in the right-hand position would seemingly indicate that the discount from the initial price was much lower.

    So ultimately it seems to be more related to our past perceptions in making a quick judgment than a reasoned view of the actual deal on offer.

  5. Anonymous says:

    I think this has a lot to do with the fact that the average American is extraordinarily bad at math on the fly. They see numbers and don’t even want to get involved in the inherent logic necessary to figure out what they’re looking at.

  6. Chris Goward says:

    Interesting result.

    These are exactly the types of tests we do with our clients every day.

    With any price test, it’s important to test several prices and their corresponding conversion rates. Then you can calculate the ROI of each result and determine your optimized price for each product.

    The same principle applies to testing product images, benefit headlines and copy points.

    More info on creating valid tests here.

    Cheers,
    Chris

  7. Peter K. says:

    I don’t know about perception of discounts, but I’ll tell you this:

    Boing Boing has trained me so well that every third time I try to parse the title of this article it comes out as, “How digital rights affect perceptions of discounts.”

    Right digits. As if southpaws have some knack for finances that we dextrals lack.

  8. Belgand says:

    It’s not about not being intelligent, it’s about perceptions. After reading the article I looked over it again and, honestly, it was tough to not see the $211 as the “better deal” even though I knew that it was the exact same discount.

    I think this is a quirk of our expectations and the retail environment as we know it, but that’s just my impression.

  9. dculberson says:

    #4, #5, re-read the piece. I think you misunderstood it. What they’re saying is:

    Given two choices, (a) and (b),
    (a)=$222 item on sale for $211
    (b)=$199 item on sale for $188

    people tend to choose (a) as the “better deal” even though (b) is a larger discount.

    So the setup isn’t flawed – it’s testing exactly what they were trying to find. If they were both equally good deals, it wouldn’t be measuring anything, would it?

  10. Anonymous says:

    so instead of $188 they’re saying $191 would be better?

  11. nick says:

    Damn, BoingBoing readers is smart! No kidding, this is the best comments section on the web.

    Per the article: it’s dispiriting to me that a)some Americans spend so much time researching how to swindle others, and b) that other Americans are so careless that they are taken in by these frauds. Market research, my ass, call it what it is: sharp practices by ethically bankrupt suits.

  12. OM says:

    …In other words, it’s another way of approaching the “Two For A Nickel” vs “Three For A Dime” scenario :)

  13. Anonymous says:

    Yeah…this sounds like some shenanigans…

    Maybe its enough to fool someone whom is severely mentally handicapped. Logic says an intelligent consumer would simply find the original price, subtract from that the sale price, to determine the actual worth of savings, right?

    Or maybe I’m over-estimating the average person’s intellect?

    Its also kind of scary that science could screw up something so fundamental – or is even wasting time doing experiments to figure this out.

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