Will a consumer respond best to a price cut on a previous markdown, or is a single (albeit larger) price cut going to make the sale? According to findings by the Journal of Consumer Research, a sale-over-sale is the best bet, even when it nets less savings for the consumer than a single, larger sale.
Why? Put quite simply: Consumers don’t like doing math, so they essentially add up the two sale percentages. By adding the two percentages, consumers have the illusion that a 33% over an already-cut 25% markdown, for example, is better than a 1/2-off sale. In fact, nearly 60% of subjects in the study incorrectly calculated a sale-over-sale (that’s almost, but not quite, two-thirds of consumers — yeah, I know my ‘rithmetic)
Ice Cream Sale! image courtesy Library of Congress
