The Rule of 100: How to Frame a Promotional Offer!
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Ever wondered how do brands decide on discounts? It’s simple, they follow the Rule 100. Read more about the rule in this blog. This rule should be incorporated by the new brands as well.
So here we go!
If the product’s price is less than $100 or INR 7000, the Rule of 100 says that percentage discounts will seem larger. For example, INR 2000 T-shirt or a INR 1000 entree, discounts in terms of INR 200 or INR 100 looks smaller. But percentage wise (10 percent or 20 percent), that same discount looks much bigger. Quick take away here: If the price of your product is less than $100, always market your discounts in terms of percentages.
What if the price of the product is above $100?
If the product’s price is more than $100, the opposite is true. Numerical discounts will seem larger. Take a $750 vacation package or the $2,000 laptop. While a 10 percent discount may seem like a relatively small number, it immediately seems much bigger when translated into dollars ($75 or $200). Quick take away here: If the price of your product is above $100, always market your discounts in terms of numerical discounts.
So when deciding how good a promotional offer really is, or how to frame a promotional offer to make it better, use the Rule of 100. Think about where the price falls relative to $100 and how that shifts whether absolute or relative discounts seem more attractive.
So, what would you choose? A T-shirt worth 5000/- marked with a INR 1250/- discount or flat 25% discount? Let us know in your comments.
Written with love,