CEO: I've got a great idea to entice users, we increase our prices 20% and give 20% discount.

Oh god, please tell me you're not serious.

  • 40
    You do know this is a legitimate sales tactic and is very likely to work, right?
  • 22
    Yes, that is exactly how it works. Mark it up and then discount it. It's an age old sales method. Any time you see something on sale, that is what they have done, or it is an old model that they want to push out of inventory.
  • 5
    @iAmNaN Or the "regular" price is severely marked up so the sale is still them turning a profit.

    Dunno if Belk is all the way over there in Texas or nah, but their clothes are usually on sale almost always, but i think the regular price is just jacked up so that it's always "on sale" making it look nice.

    It's all some psych 101 stuff lol
  • 2
    Yep, we have Belk. Yep, when you look at the price, and you have an idea of what it normally is, you can see the game they are playing. And it really works on the Muggels.
  • 3
    @iAmNaN The clearance rack is my best friend.

    Or like sales + coupons lmao.

    I've bought the vast majority of my clothes from there and I refuse to pay full price. $50 button down "fishing" shirt? Nah. I waited for it to be marked down permanently to $15 and then copped it lol
  • 3
    @Stuxnet that's why I hit up Ross for my Converse All Star Chucks, because I know what the real price is and what a real sale price looks like. And they are still making a profit.
  • 4
    @iAmNaN TJ Maxx is the shit for Nike, Under Armour, etc.

    Im a broke ass college student so I can't pay for these fucking Vineyard Vines and Patagonia shits that most people wear.

    Which idgaf honestly, I just wanna look good and be comfortable
  • 0
    For products yes, but this is a service in a highly regulated market. Government will kill us if they found out.
  • 19
    Actually the result is 4% cheaper than the original price (1.2*0.8 = 0.96)
  • 6
    @AllanTaylor314 beyond marketing tricks I was curious who's gonna do the math on this.
  • 11
    @klekih you'd need to increase the price by 25% for 20% off to be the original price
  • 4
    @AllanTaylor314 cheaper maybe, but it still artificially inflates the product's desirability

    For eg. If the thing cost 100 and you bought it at full price earlier, you're getting 100 perceived value

    Whereas if after the manipulation you buy it at 96 you get 120 perceived value

    So customers would be more likely to buy it because they think they're getting a better deal per unit currency than before (120/96 > 100/100). The increased sales might very well cover up that 4% reduction per piece.
  • 2
    There are other reasons, one of which is to help with advertising costs.

    Eg. you increase prices, and give a different discount code on each advert.

    Then you can see which adverts bring in customers, and which don't.

    Allowing you to cut costs for non-productive adverts, and perhaps increase advert size/etc. in the areas that do bring in customers.

    Eg. You may find an advert in your local hairdressers bring in customers, but one in the local library brings in none at all.
  • 1
    I’m cold. I need a longer blanket. I’ll just cut some material off of one end and sew it onto the other end.
  • 2
    Amazon does this. Literally everything is always discounted from a made up price they never charged anyone.
  • 1
    You just described the Black Friday in my country.

    Some of us call it Fake Friday.
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