From an Inc.com article about the birth of Flickr: (via UIE Brain Sparks)

George Oates and Caterina Fake would spend 24 hours, seven days a week, greeting every single person who came to the site. We introduced them to people, we chatted with them. This is a social product. People are putting things they love — photographs of their whole lives — into it. All of these people are your potential evangelists. You need to show those people love.

Social in both senses. I’m not going to use the word ‘viral’, because I hate it, but it’s clear that Oates and Fake’s hard work paid off. But it outlines the need for community building on the web; users as evangelists and promoters, the audience handing out their own flyers.

The deal was only offering a savings of approximately 10% more than their everyday, normal Buy-Two-Get-One-Free deal, yet some sort of tipping point was reached which made sales go utterly, utterly crazy. Why do you think that was?

It’s an interesting question for any behavioural economist, and indeed for any marketing professional. What’s the nudge which sends the snowball over the brow of the hill? Would the demand have been quite so great had Threshers merely offered people an extra 10% off? Probably not.

Economists call these phenomena framing effects — changes in the way something is described, despite no change in the substance of the thing, can have a dramatic effect on behaviour.

So, when Threshers are effectively offering an extra 10% off their existing offer, labelling it instead as a 40% discount has a huge impact on demand — why?

Of course, this is no real surprise to those in the advertising industry or any kind of sales role, but I think there’s a fairly simple answer to Hugh’s question: magnitude.

10% discounts aren’t anything out of the ordinary, whereas 40% discounts are.

The overwhelming response to the voucher leak was triggered by the percentage value on the flyer, and it’s a common enough sales tactic. When upselling, add to the price in small increments; when discounting, give people a big headline figure. I don’t think we need to look for subtlety here.