Why Discounting Is Bad: How It Impacts Buyer Psychology and How to Do It Right

Rishi Rawat Blog Posts Leave a Comment

There are no two ways about it, discounting negatively affects buyer psychology.

I’m not a fan of discounting for a few reasons.

Discounting is bad because…

  1. It can lessen the perceived value.
  2. It has a holo effect: if I landed on your site saw a 20% discount on product A I now expect to see a discount on product B too.
  3. Even if I convert, I’ve now added you in the “this retailer offers great discounts” bucket. Now when you reach out to me in 6 months for your next amazing product I’ll only buy if it’s on sale. You’ve trained me to act based on discounts (Pavlov’s dog).
  4. If you offer a deep discount you run into more issues.

“But doesn’t discounting improve conversions?”

Sure, but at what long term cost to your business?

So, don’t have a discount first approach.

But …

Sometimes, retailers do offer discounts. This is reality.

My advice is that when you offer a discount wrap it around a compelling story. That way you can discount, improve conversion, and not hurt your brand.

The trick is telling a compelling story (related post: Anatomy of a Compelling Story). That you are letting the visitor know that the discount isn’t the norm, they’re just lucky to have stumbled on it.

This has 2 benefits:

1: It makes the user feel lucky to have visited your site today versus 2 months ago.

And 2: it let’s them know this isn’t a norm. So now the user isn’t added you to the dreaded “this retailer offers great discounts” bucket.

I was on Withings and decided to pull the trigger on their beautiful Steel HR 40mm Black watch. It helped that it was discounted $60. But as we discussed above discounts can be dangerous.

Here is how I would have solved this. I would have added a link that said, “Why the discount?” (notice the link right below the $119.95 price). Note: Withings isn’t a client. This is a made-up example to illustrate our copywriting process.

Discounting strategy being used by an online retailer. This how to influence buyer psychology.
Notice the “Why the discount?” in screenshot above

And on click I would have shown a popup message like this:

Had you visited this page in February you would have seen the full price. We don’t discount often. But, we want to encourage shoppers to up their fitness game. And since the weather outside is improving we thought, Why not? Let’s give a little boost to encourage shoppers to take their fitness to the next level.

This is literally the only way to offer a discount and not hurt buyer psychology.

We’ve been studying online shopper behavior for the last 11 years. Learn more about us.

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