Give Round or Precise Discounts

Which discount is better: 24.7% or 25%?

It depends.

Round numbers can feel larger: A drink was more energizing with 100mg of caffeine (vs. 102mg; Pena-Marin & Bhargave, 2016; Thomas et al., 2010).

However, precise numbers feel unstable. You imagine 24.7 on a narrow scale in which any movement — even a slight nudge — can change this number.

Subconsciously, 24.7% can easily change. Perhaps even disappear. Therefore, customers feel motivated to grab this discount while it's still available. Indeed, customers were motivated by a 6.8% (vs. 7%) discount because they believed it would end sooner (Jha et al., 2023).

How to Apply

• Commit to One Side. Your discount should be 7.7% or 10%. Not 8%.
• Adjust Discounts for Segments. Are customers motivated by price? Give 25% off. Urgency? Give 24.7% off.
• Add Decimals to Long-Term Discounts. 16.2% off can imply urgency even if there's no deadline.

• Pena-Marin, J., & Bhargave, R. (2016). Lasting performance: Round numbers activate associations of stability and increase perceived length of product benefits. Journal of Consumer Psychology, 26(3), 410-416.
• Thomas, M., Simon, D. H., & Kadiyali, V. (2010). The price precision effect: Evidence from laboratory and market data. Marketing Science, 29(1), 175-190.
• Jha, S., Biswas, A., Guha, A., & Gauri, D. (2023) Can rounding up price discounts reduce sales?. Journal of Consumer Psychology.