The Psychology of Prices & Percentages in Promotions

What's a more persuasive offer in a headline -- "25-50% off" or "up to 50% off"?

According to Marketing Experiments' Yoda-smart Dr. Flint McGlaughlin, when shown an X-Y range of numbers in an ad, most people will revert to the first number as the mean (average) standard. So with a headline of 25-50% off, it will be assumed most items are 25% off, and very few are 50%. (This is not surprising when you think about scratch-and-win tickets with prizes ranging $5 to $50,000. You assume most prizes awarded are at the lower end of the range.)

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Based on his research, Dr. McGlaughlin recommends using the "up to X% off" tactic instead of a range. Similarly, "up to 50% off" is more persuasive than "over 25% off." On the flip-side, when dealing with dollar figures rather than percentages, you want to use your lowest price point in your ad. "From $50" is better than "$50-$150."

Customers are also not rational when it comes to shipping offers. Professor at the Wharton School of Business, Dave Bell, found that consumers preferred free shipping worth $6.99 in savings over a $10 discount on the product.

This understanding can help you craft more persuasive email subject lines, banners and pay-per-click ads to create higher response. Of course, here at Get Elastic we encourage you to test everything. Have you tested price ranges or shipping offers and found the opposite to be true?