End Discounts Gradually

Gradually retracting a discount boosts sales.

Discounts transitioning from 30% to 20% to 10%

Overview

Consider the price of a television. Most businesses choose one of two pricing strategies:

Hi-Lo Pricing. $999...then $799...then $999.
Everyday Low Pricing. $919 every week.

But recently, there’s a new strategy called steadily decreasing discounts. You gradually retract a discount:

$999...then $799...then $899...then $999

Over a 30-week span, researchers tested all three pricing strategies for a $24.95 wine bottle stopper. Revenue was highest with the gradual retraction (Tsiros & Hardesty, 2010).

Tsiros, M., & Hardesty, D. M. (2010). Ending a price promotion: retracting it in one step or phasing it out gradually. Journal of marketing, 74(1), 49-64.