🎓 Discounts work better for “guilty pleasures”

Discounts are 2.4x more effective for products bought for fun or pleasure (e.g. fashion, chocolate) because those purchases are harder to justify.                                                                                                                                                                                                                                                                                                                                                                                                                 May 21, 2024 | [Read Online]( Discounts work better for “guilty pleasures” Discounts are 2.4x more effective for products bought for fun or pleasure (e.g. fashion, chocolate) because those purchases are harder to justify. [Thomas McKinlay]( [fb]( [tw]( [in]( [email](mailto:?subject=Post%20from%20Ariyh&body=Discounts%20work%20better%20for%20%E2%80%9Cguilty%20pleasures%E2%80%9D%3A%20Discounts%20are%202.4x%20more%20effective%20for%20products%20bought%20for%20fun%20or%20pleasure%20%28e.g.%20fashion%2C%20chocolate%29%20because%20those%20purchases%20are%20harder%20to%20justify.%0A%0Ahttps%3A%2F%2Ftips.ariyh.com%2Fp%2Fdiscounts-work-better-for-guilty-pleasures) New to [Ariyh](? This is a 3min practical summary of a scientific study 🎓 Join 27,644 marketers who use science, not flawed opinions 📈 [Subscribe here]( Today’s insight is brought to you by… [Taboola]( Need to reach new audiences in an engaging way, at scale? Try native ads. Your ads will show just when people are looking for a product like yours or reading something related to it, and blend in seamlessly within the content. How? It’s simple, [Taboola]( does it automatically for you, reaching 500M+ daily active viewers in top media publications around the world. [Talk with Taboola]( now to start scaling your marketing strategy. [Contact Taboola Now]( Want to sponsor Ariyh? [Here’s all you need to know](. 📝 Intro You manage a big homeware store that sells many types of products ranging from pleasurable, feel-good items like scented candles to functional items like buckets and ladders. You've noticed that when you run discounts for home scents or decorations, the sales increase dramatically. But they increase much less when you run the same discounts for your functional home goods like cleaning supplies. Here’s what happens, according to science. P.S.: Want to charge more profitable prices and run more effective promotions? Grab the [Ariyh Pricing & Promotions Playbook]( to quickly apply all the latest evidence. Want to access hundreds more insights like these? [Explore Ariyh insights here](. Price promotions are more effective for pleasurable (e.g. cosmetics) vs functional products (e.g. superglue) Topics: Promotions For: B2C Research date: May 2016 Universities: Columbia University, Tsinghua University 📈 Recommendation Use price discounts (e.g. $10 off) when promoting fun and pleasurable products (e.g. candy, perfume). Focus your messaging on the product’s pleasurable benefits (e.g. taste, beauty) to boost the price promotion’s effectiveness. For functional and practical products (e.g. bin bags) quantity promotions (e.g. “Buy 5, get 50% off”) work better. 🎓 Findings - Price promotions are more effective when a product is or seems to be pleasurable or fun (e.g. chocolate, art, board games). - Across 12 experiments in a variety of product categories (consumer electronics, movie DVDs, chocolate bars, magazines) and promotions (coupons, discounts, rebates), researchers found that people were: - 139.7% (2.4x) more likely to buy a Godiva chocolate bar with “50% off” if they saw it as a snack for their pleasure (vs. an energy source for a hiking exercise). - 52% more likely to buy a city guide magazine when it was framed as pleasurable (vs. when not framed as pleasurable), with a 50% off coupon. - 53.3% more likely to buy headphones when they were to be used for pleasurable (music, movies) vs functional purposes (to study a foreign language). - The effect weakens if people: - Buy the pleasurable product to gift it to others - Consciously think about the reasons to buy or not buy - Keep their purchase private, because they feel less need to justify it (e.g. eating out with friends vs ordering food delivery) - Encounter a quantity-based discount (“Buy 5, get 50% off”), which is instead effective for functional products 🧠Why it works - We feel the [need to justify]( our decisions. - Pleasurable purchases (e.g. chocolate, movies, vacations) come from our desire for fun, which feels harder to justify than functional products that are clearly necessary (e.g. office supplies, medicine) - Certain situations or actions (e.g.[resisting an earlier impulse purchase](, [making healthy choices](, or [working hard]() can give us some sense of “[right to indulge](” and make us more likely to make those pleasurable purchases. - Similarly, price promotions can [motivate and justify]( our pleasurable purchases and “guilty pleasures” (e.g. “What a good price! Makes it worth it just this once.”). Join the Essential Community for Marketers Stay ahead of the curve and join the thousands of marketers shaping the future of marketing with the [American Marketing Association](. As the largest community-based marketing organization, you’ll find award-winning content, professional certifications (PCM®), industry-leading training events, and vibrant local chapters. Members get access to an abundance of resources, on-demand courses, and the most essential community in marketing. [Get exclusive benefits when you become a member today!]( This announcement was sponsored. Want your brand here? [Click here](. ✋ Limitations - Experiments were run with students in hypothetical purchase decision scenarios. Although the experiments were many and well run, the study did not measure the effect in the field (e.g. in a real store). - It is unclear if the effect would apply to luxury products. When buying luxury, [exclusivity](, and prestige are the justification for the purchase. Price promotions might backfire by weakening perceived status. 🏢 Companies using this - Most companies seem to use price discounts indiscriminately no matter the product type. - For example: - Cadbury correctly gave a 50% discount on Cadbury Boost Chocolate Bar - LookFantastic, a cosmetics retailer, correctly offered a 40% discount on an Armani Diamonds perfume - Amazon incorrectly gave $2 on a collection of post-its, while a 3x2 deal would have likely worked better Ice cream sale on WoolWorths. The discounted price motivation should work well for these indulgent products. ⚡ Steps to implement - Use price promotions (e.g. 50% off) instead of quantity promotions (e.g. Buy 10 pack for 50% off) for pleasurable, enjoyable, or emotional products. - In promotional messaging, focus on pleasurable characteristics (e.g. sensual, exciting, fun). - Use bundle and quantity offers for functional products and loyalty programs. It will help to [increase customer lifetime value](. - Try bundling a functional product with a pleasurable one (e.g. kitchen blender and glassware set; textbook and a sweatshirt) and [frame the discount]( as savings on the pleasurable item. This is likely to boost bundle sales (e.g. sweatshirt and a textbook). 🔍 Study type Lab experiments 📖 Research The effects of promotions on hedonic versus utilitarian purchases. Journal of Consumer Psychology (May 2016) 🏫 Researchers - Ran Kivetz. Columbia University. Columbia Business School - Yuhuang Zheng. Tsinghua University Remember: This is a scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s [how science works](). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely. What did you think of today's insight? Help me make Ariyh's next insights 🎓 even more useful 📈 [💜 Loved it!]( [✌️ Okay]( [🫤 Meh]( Here’s how else Ariyh can help you: - 📈 Access 100s of insights and learn how other evidence-based marketers apply them, with [Ariyh Pro]( - 📘 Supercharge your business with Ariyh’s [Playbook of Pricing & Promotions]( or [Playbook of Ecommerce]( - 🎓 New to Ariyh? If this was forwarded to you can subscribe below for $0 [Subscribe here]( [fb]( [tw]( [ig]( [in]( Update your email preferences or unsubscribe [here]( © 2024 Ariyh Calle Bailen, 11 Barcelona, Barcelona 08010, Spain [[beehiiv logo]Powered by beehiiv](