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📝 Intro

Most offers come with a restriction (and if they don’t they usually should).

For example: 

• “$20 off if you spend at least $100”

• “2 for 1 for selected products in promotion”

• “10% discount valid for 7 days”

These promotions are typically presented in this order:

1. Attractive offer (e.g. $20 off)

2. Restriction - that nobody wants to hear (e.g. only if you spend $100)

It’s rare for companies to present offers the other way around.

They’re wrong.

Here’s how you can stop leaving money on the table.

Remember: Each Ariyh insight is a practical summary of a published, peer-reviewed, scientific research paper. Not an opinion or sketchy data. This is science.

Previous insight: Say “Gift” not “Donate” to increase donations (100+ more insights here)

Describe the restriction of your promotion first, then the offer

Channels: Promotions | Discounts
For: B2C. Can be tested for B2B
Research date: August 2022

📈 Recommendation

Explain your promotion by describing the restriction first, and the offer second.

For example, “On select weekends enjoy 40% off”, not “Enjoy 40% off on select weekends”.

People will pay more attention to your offer, feel more in control, think it’s fairer, and will be more likely to buy it.

🎓 Findings

• People are more likely to buy a promotion when it describes the restriction first (e.g. “When you buy 2”) and then the offer (e.g. “Get 50% off”) - compared to the other way around (offer first, then restriction).

• For example, as part of a series of 4 experiments:

  • People said they were more likely to buy an offer that said “When you buy two tickets save 50%” vs “Save 50% when you buy two tickets”

  • An email campaign to 329,647 basketball fans had an 8% higher click-through rate (3.51% vs 3.25%) when it said “Select Mavs tickets 30% off” vs “30 off select Mavs tickets”

A typical example of what you should NOT do, according to the latest science

🧠 Why it works

• We prefer to hear bad news first and good news second. Research found that 66% to 88% of people have this preference.

• When a promotion is framed as bad news (the restriction) first and good news (the offer) second, we pay more attention to the good news of the promotion (e.g. $20 off), rather than the restriction (e.g. on selected products).

• We also feel more in control and that the deal is fairer. That’s because the promotion is reframed as a reward that we get for doing something (e.g. spend a fair amount and you will then get this reward), rather than an irritating restriction put there by the seller (spend this or else you don’t get what I just offered). It feels more like a choice we can make, than a restriction on an offer.

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✋ Limitations

• The study focused on promotions of services (e.g. vacations, concerts, sport events). However, based on what drives the effect, the researchers expect similar results for other products too.

• The researchers did not investigate whether and how the effect varies depending on the type of restriction (e.g. discount for students vs spending amount) or its size (e.g. spend $500 to get $10 off vs spend $50 to get $10 off).

• Other ways of reframing promotions as rewards might activate this effect (e.g. “40% Off: Your reward on select weekends.”). This was not tested.

• It’s possible that people’s long-term impressions of a company change when they use restriction-first promotions (e.g. start to perceive the company as fairer). This was not measured in this study.

🏢 Companies using this

• Most companies frame promotions offer-first, restriction-second. 

• For example:

  • Lowe’s: “20% off when you buy 10 or more” (vs “When you buy 10 or more save 20%)

  • Walmart: “Get $10 off when you spend $50 of more” (vs “Spend $50 or more and get $10 off”)

  • Texas Rangers: “Score 50% off Rangers tickets for select games” (vs “For select games score 50% off Rangers tickets”)

This promotion from UberEats got it right by explaining the restriction first (“Spend £15”)

⚡ Steps to implement

• Frame your offer putting the restriction first. The promotions should feel like a reward to the reader.

• And remember:

  • Use % off (e.g. 15% off) when a discount is valid for most or all products that you sell. Use $ off (e.g. $50 off) when the promotion is valid only for one or a limited number of products.

  • Use % off when your product is priced below $100. Use $ off when your product is priced above $100 (or 100 in any currency)

  • You can find all the latest techniques for promotions and pricing in Ariyh’s Science-based Playbook of Pricing & Promotions (it’s also a great way to support Ariyh, for only $35. For example, you can gift it to a friend)

🔍 Study type

Online experiments and field experiment (in collaboration with NBA team the Dallas Mavericks)

📖 Research

Have We Got a Deal for You: Do You Want the Good News or Bad News First?. Journal of Service Research (August 2022).

🏫 Researchers

• Kirk L. Wakefield. Hankamer School of Business, Baylor University

• Priya Raghubir. Stern School of Business, New York University

• J. Jeffrey Inman. Katz School of Business, University of Pittsburgh

Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s how science works). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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