discounts-bonuses-customers

Which is the better choice for your business? Source: Unsplash/Tom Official.

Finance
Bri Williams

Is it better to offer your customers discounts or bonuses?

Authors
Bri Williams
Business Advice
4 minute Read

Sometimes it is appropriate to entice customers with a little something extra: either in the form of a discount (so they pay less), or a bonus (so they get more).

But which is better?

The economic argument is that it shouldn’t matter. Let’s say the standard price is $100 for 10 widgets. We could either offer our customer 10%, or $10 off, so they pay $90, which is $9/unit. Or, we could offer a bonus where they pay $100, but get 11 units of value rather than 10. This too equals $9/unit.

So on paper, there’s little difference. But from a behavioural science mindset, which offer is actually going to benefit our business best, and appeal most to our customers?

Subscribe to keep reading

Get unlimited access at half the price. Election sale now on.
Learn more
Already a Plus member?

 

Close
SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Show
Forgot your password?

Want some assistance?

Contact us on: support@smartcompany.com.au or call the hotline: +61 (03) 8623 9900.