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Price Discount or More for Free?

Is it better to offer more of a product for free, or offer a price discount?

Consider this example of chocolate (though the concept is true for any product).

Price Discount or More for Free? 1

In this example we’ve got two bars of chocolate. The difference is on the left you’re offering a 33% price discount from the usual $2.99, and on the right you’re offering 50% more for free.

In both cases you’re making the same amount of money – 2 cents for each gram of chocolate you sell. They are the same deal.

But – research tells us that consumers will tend to respond to the bonus free option more than the price discount option. You’ll earn more money from sales buy always offering ‘more for free’ rather than offering a straight discount.

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