Which Discount Offer Works Best: Percentage Off or Dollars Off?
By Anna Johnson on July 26th, 2008Running a promotion… or making discount coupons available… and wondering whether to state the offer as a percentage off… or dollars off?
You probably have an opinion about which works best (which may or may not be based on experience!) but, as we have and will continue to stress, this is a classic question that can and should be tested.
Evo, an etailer recently profiled by MarketingSherpa, conducted a simple split-test to see whether a “15% Off” or a “$50 Off” email offer would generate the most sales. Evo found that “$50 Off” had a 82 percent greater conversion rate and beating “15% Off” and achieving 170 percent greater revenue. Email open rates and click-through rates were practically the same, at 19-20 percent and 32-33 percent respectively.
Do read the article for more interesting insights (you’ll need to register for free access) but the lesson is clear: no, not that dollars off will always beat percentage off… but this is an area that should definitely be tested.
It’s all about perceived value… and arguably clarity as well. In Evo’s case, “$50 Off” was perceived as offering greater value than “15% off”… but what if the comparison was between “$1.43 Off” and “25% Off”? And what if you tried “1/3rd Off”? Again you probably instinctively have an opinion, but your prospects will give you the true answer. You need to test!
