As Christmas shopping ramps up, you may be getting a lot of emails offering you attractive discounts for a short period only. You may see flash sales or special deals that exhort you to “buy now” to avoid missing out.
These digital “time-limited” offers, as they are called, are actually an old sales tactic.
Those in the game of selling cars, for example, have long used the trick of alluding to that other very interested buyer who’s likely to return and snap up the bargain that’s before you. Telephone salespeople routinely offer deals that must be accepted during the call.
Want time to think about it? Too bad. Online time-limited sales work on the same basis, but with technology taking it to a whole new level. Now retailers can bombard you with offers that are highly customised and super-short – a deal, perhaps, for something you might have been searching online for, and now available at a discount only until midnight.
But for these tactics to work, our research suggests, requires finding a Goldilocks zone between being too pushy and not all.
Time needs to be limited to deter you from searching elsewhere for a better deal. But paradoxically you also need enough time to convince yourself that buying is the best decision
To find out what makes time-limited offers effective, I and my colleagues Robert Sugden and Mengjie Wang from the University of East Anglia ran experiments to see what leads people to accept or reject such offers.
What we found is that these offers leverage risk-aversion. That is, the more you dislike risk, the more likely it is you will take the bait and buy now. In our experiments, using university students, we asked participants to complete 30 “price search” tasks.
These tasks involved giving participants a “budget” and asking them to buy a product from six different price offers, shown to them sequentially with a few seconds between each. Any unspent money they got to keep.
