One of the most common questions clients ask when planning coupon campaigns is: “Would you recommend communicating the discount as a percentage or as a fixed amount?” It is important to note from the outset that neither type of discount is universally more effective. Its performance depends on the price of the product, the product category and, above all, how customers perceive the value of the offer.
A specific amount works better for lower-priced products
As a general rule, fixed-amount discounts often perform better for lower-priced products. An offer such as “Save €10” is immediately clear. Customers do not need to calculate the value of the discount, and the specific amount makes the saving feel more tangible.
Example: €10 off or 25% off?
Let us imagine an average order value of €39. In this case, the retailer could communicate the offer as:
€10 off vs. 25% off
Although the resulting saving is similar, customers often respond more quickly to a specific monetary value. In this example, customers can process the €10 saving more easily and may perceive it as more attractive.
What can the difference look like in practice?
Percentage and fixed-amount discounts in practice: customers may perceive the same underlying incentive differently depending on the value of the product and the overall purchase.
Percentage discounts work better for higher-priced products
Percentage discounts often perform better for more expensive products. As prices increase, customers are more likely to consider the saving in relative terms.
Example: A discount on a watch
Imagine that your online store offers a wide product range and a customer is considering purchasing a watch for €600. If the coupon offers a discount of only €10, the customer may not perceive it as a significant benefit. Saving €10 is therefore unlikely to provide a strong enough incentive to complete the purchase.
By contrast, if the coupon offers a 20% discount, the customer immediately recognises that they are saving a significant proportion of the product’s value. This makes the offer feel psychologically more compelling.
For this reason, percentage discounts often achieve better results for higher-value products, while communicating a specific monetary saving tends to be more effective for lower-value purchases.
When is a fixed-amount discount significantly more effective?
When acquiring new customers
- €5 off the first purchase
- €10 for registering
- A €15 coupon for subscribing to the newsletter
Customers know exactly what they will receive.
The offer “Get €10 off your first purchase” is often clearer than “Get 10% off your first purchase.”
When the discount requires a minimum order value
For example:
“Get €10 off when you spend over €50.”
This type of offer encourages customers to increase the value of their shopping basket.
When is a percentage discount significantly more effective?
Percentage discounts tend to be particularly effective for premium products, such as:
- electronics,
- furniture,
- sports equipment,
- luxury fashion.
The psychology of discounts: the Rule of 100
Research suggests that customers tend to:
- respond more strongly to a fixed monetary saving for lower-priced products,
- respond more strongly to a percentage discount for higher-priced products.
This effect is known as the Rule of 100:
- if the product costs less than €100, it is generally better to communicate the discount as a monetary amount,
- if the product costs more than €100, it is generally better to communicate the discount as a percentage.
How should you choose the right type of discount?
The most effective type of coupon depends not only on the size of the discount but, above all, on how customers perceive it.
For products priced below €100, a specific saving in euros is often more persuasive. For more expensive products, a percentage discount generally works better because customers perceive a greater relative value.
To maximise campaign performance, test both formats or communicate the discount using a combination of the two. This approach combines the impact of a percentage discount with the clarity of a specific financial saving.
