10% off isn’t an effective way to boost conversions (but we have a solution)
Every day, we print a myriad of promotional flyers, postcards, brochures and banners for our clients. We’ve seen every type of promotion that businesses use to boost conversions. Luckily, we have great relationships with our customers. Quite frequently we follow up to hear the results from the campaign. One thing that rarely ( if ever) works to boost conversions is the “10% off special”.
10% on the surface seems quite appealing, so why isn’t it effective?
Discount sales can be an effective way to boost conversions. So effective in fact, that some stores have year-round sales. By artificially inflating their original prices, these stores offer permanent discounts. A few years back, Groupon got into hot water for inflating original prices to offer larger discounts and in recent times, Kogan was fined for artificially inflating prices before a sale to offer a larger discount. Almost every store in a shopping center will be advertising some kind of sale- normally promoting discounts between 40-80%. In comparison, your meagre 10% discount just isn’t appealing.
So, if you’re not keen on artificially inflating your base price and your margin doesn’t allow for 50%+ off, what alternative do you have?
Try value adding instead of discounting to boost conversions
Adding value can be much more appealing than a 10% discount. However, for this to work effectively, the recipient needs to perceive the “add-on” as valuable . For example, a makeup company offering a free makeup bag for purchases over $50 could be an appropriate incentive to entice customers to spend more money. Alternatively, a computer store can add value by promoting free warranty on all new purchases. If you’re business-to-business, perhaps access to a library of resources for personal or business development will boost conversions.
Ultimately, the most effective value-adds are the ones that cost the least, but are perceived as high value by your customers.