Does Dell's hidden discounting work? It's a mystery to me.
Clearly, we’re all looking for new ways to drive sales in a down economy. Here’s one worth looking at more closely. Dell sent a new promotion over the weekend, offering “Mystery Savings.” It looked like this:
That’s right. You don’t know what your savings will be until you enter your promotion code. Could be 35%. Could be 25%. Who knows?
Worse still, Dell’s landing page really fails Bryan Eisenberg’s “scent test.” Where on the page do they talk about this offer? It’s a mystery to me.
While I like this concept as a test – and I hope it’s a test – I suspect Dell is going to end up with lots of cart abandonment once customers see the discount.
What do you think? Is Dell onto something here? Would you offer a similar concept to your customers? Tell us about it in the comments.
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This reminds me of the Scratch and Save promotion the Hudson’s bay company up here in Canada uses often. You usually get the lowest tier, but 25% off ain’t bad for a computer and I think there’s an element of fun thinking you “could” get even higher discount – but I agree it’s easy to abandon the cart if you don’t get your high discount. There has to be more motivation to buy than a possible ridiculously good discount vs. just an average sale price.
I recall from a Marketing Experiments webinar discussing the psychology of price, when you list “10-50% off” people remember the first number
http://www.getelastic.com/the-psychology-of-numbers-in-ppc-ads/
and assume that’s what they’re going to get. Wonder if that affected Dell’s situation?
It actually reminds me of the treasure hunt in the Stickiness chapter of the Tipping Point. TV commercials referenced a mysterious gold box instructed viewers that you could get a discount by looking for the gold box in print ads. If I remember correctly, the ads with the gold box mystery drastically outperformed the traditional ads they were being tested against. I wonder if these Dell ads will be at all successful.
@Linda – Good point. I would think a 35% discount would get me excited. For that matter, so would 20% off. The problem I have with this type of promotion is that I suspect I’m going to go looking for the 35% discount code (can’t you just see customers searching “Dell 35% promo code” on Google?) since I “know” it’s available. Seems to me they’d be better off testing a control and a challenger.
I do like the “fun” aspect of it, so you may be right. Who do we know at Dell who’ll spill the beans on its outcome?
@Jake – Another good point, Jake. Maybe the “mystery” is a compelling hook. But if it’s truly a mystery, should they be announcing the possible values? Wouldn’t waiting to present the possible values do a better job? To me, this method sets an expectation (“up to 35%”) that Dell may or may not meet. As an old friend of mine likes to say, that creates “antici-pointment.” 😉
To add insult to (arguable) injury on this one? Dell sent an update tonight noting their original discount of up to 35% on monitors and storage is actually only 30%. Not that we haven’t all been there, but this whole thing may not go down as Dell’s finest moment, eh?
Thanks, both, for the comments. You’ve definitely given us all some great food for thought.
When it’s obvious and not hard to find, I think this might be a fun approach to discounts. At the very least, it adds a little stickiness to the site. I noticed that Solid Cactus recently added this feature to their Yahoo! stores add-ons. I thought it was cute. No idea if it converts or not, but it made the site more memorable to me.
Thanks for the comment, Susan. What did Solid Cactus do? I’d love to hear more about how that worked.
Thanks again for reading.
Tim