When people miss out on an offer, they will be less likely to buy that product for the original price in the future

Neuro Usability Insight #17

“Think carefully about your price and discounting strategy, especially during short-term price wars. You risk consumers setting a new, inflexible expectation regarding too great a bargain ” 

– Arkesa, Kung & Hutzel

When people know that a product has been discounted before, they experience often difficulties with processing the pain of a missed opportunity. As a consequence, this affects their perception of value of this specific product. People subconsciously perceive the value of the product as lower: the discount gives the product a lower baseline value. With this perspective, people will be less likely to pay the full price again for the same product. Therefore, it is important to keep in mind that the perceived value of a product lowers when it has been discounted.

Applications

  • Consider to offer discounts not too often.
  • Consider to minimise the inaction inertia effect by slightly changing the product characteristics.
  • Keep this long term effect of discount in mind while A/B testing.

Example neuro usability insight 17

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