It’s showtime as the New York Boat Show opened Wednesday and the show in Houston opens Friday. They’re starting off the industry’s critical winter boat show season with anticipation of gains in attendance and continued increases in sales.
Between now and Easter, hundreds of dealers across the nation will show off their hottest models in local boat shows. And, as they prepare their exhibits, the inevitable question will arise: should we have a sign on each boat that shows the dollars off or the percentage off?
One might assume it makes no difference -— kinda like “Which came first? The chicken or the egg?” It doesn’t matter, we’ll eat them both.
But studies show what dealers decide about their signs could matter. Consumers definitely react differently to discounts depending on whether they’re presented as an amount off or a percentage, according to a study led by Eva M. González of Monterrey Institute of Technology and Higher Education. Even more important is that it’s especially true for more expensive products.
“Even when people understand percentages and dollar amounts,” González says, “consumers tend to focus on an absolute number in isolation.” Similarly, a study by Blue Hornet Marketing asked 1,000 consumers which they preferred. The result: 42 percent of respondents said dollars off was the most attractive offer, with a percentage discount coming a distant second.
Actually, these findings aren’t really new. Four years earlier, an e-commerce company got a similar result in a coupon study. The $50-off coupon generated 170 percent more revenue than the 15 percent off coupon. So why is that?
It’s all psychological or as some that study behavioral economics have coined: it’s the “art of positioning.” It’s creating perceived value and, while the two discounts are identical, one feels bigger. So good positioning says all deals aren’t created equal, even if they are. The dollars-off savings are right there in black-and-white (no mental calculations) and simply appear more compelling.
But what about the connotation of something being “free?” Well, if you really want to turn heads, the word “free” has the power. Forget the dollars-versus-percentages dilemma for just a minute. The word “free” is considered among the most powerful words in marketing. It stirs excitement like no other, experts say. “Free” commonly gets people to radically change their choices.
For example, offering a free electronics package or trailer or dockage or maintenance deal or similar incentive and strongly noting the value as “you save X dollars” could do it. Indeed, the auto industry is using such dollars positioning with great success. So if you need a word to get prospects into your show booth, “free” could be that word.
The end game, of course, is sales success at and following the show. So if you’re going to be in the battle of the discounts, the way you frame yours will affect how generous your sale is perceived and, in turn, the success of your sales team.
If perception is reality, then take time now to carefully consider what each of your display signs will say. Go with the study results — show dollars off instead of percentage off. And it couldn’t hurt to have a freebee leader displayed prominently in your exhibit.