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Marketing Hacks Exposed: How to Find the Best Deals

Every day, you as a consumer are bombarded by marketing tactics that you may or not be sensitive to. Wherever you look, you will find discounts such as 10% off a particular item, $25 off your purchase if you spend more than $150, or buy one and get one at half price – to name a few. These offers are designed to pique your interest and encourage you to choose a particular product or payment method. However, with so many options, knowing these marketing tactics can make you a much more informed consumer and help you save lots of money.

As Jonah Berger writes in his acclaimed book, “Contagious,” there are many subtle ways of framing the same information that can make consumers more compelled to purchase.

Understanding some basic market and marketing tactics can help you not only find the best deals but also help you save a small fortune on large purchases.

Berger gives a poignant example. Imagine a casual clothing store owner that’s having a sale. Usually, a particular line of t-shirts costs $20 per shirt, but the owner wants to mark them down to $15 a piece. There are two ways the store owner could advertise that discount. One would be as a percentage. Going from $20 to $15 would be 25% off. Alternatively, the store owner could also discount the same amount as an absolute number – $5 off. Which way is better?

He introduces another example, taking the same situation but upping the stakes. Rather than a $20 t-shirt, what would happen with a $2,000 laptop. A 25% discount would take it down to $1500, and $500 off should equal the same amount. In both cases, the laptop would cost $1500. It turns out that it doesn’t feel the same to the consumer. For a $2,000 item, $500 off seems more significant than 25%, which makes people more likely to purchase when they see the absolute dollar discount.

Berger introduces a principle from retail marketing called The Rule of 100. The Rule of 100 says that under 100 percentage discounts seem larger than absolute ones. But over 100, things reverse. Over 100, absolute discounts seem larger than percentage ones.

In today’s highly competitive mortgage market, I am seeing similar marketing tactics that persuade shoppers into unfavorable terms. For instance, consider two mortgage offers: Offer A: 0.25% off your interest rate or Offer B $1,000 less in closing costs. Just like retailers use discounts to catch your attention, brokers and lenders use different methods to make their mortgage offers more appealing.

My advice is to look beyond the initial offer. Calculate the total cost of the mortgage, including interest payments over the life of the loan and any upfront fees. Consider the Short-Term and Long-Term Savings. An interest rate reduction can lead to one form of savings but might not be as impactful as a dollar discount upfront. It would be best to determine what’s more important for you – lowering your monthly payments or your upfront costs. This will help you decide which type of discount to prioritize.

Finding the best mortgage deal requires careful consideration of how offers are presented. Remember, the best deal isn’t always the one that looks the most attractive at first glance—it’s the one that offers the most value for your specific situation. As with any large purchase, you need personalized advice and guidance. Now more than ever, you need to consult with expert and trusted mortgage advisors and real estate professionals who can help you navigate the complexities of home financing. Good luck out there!

Would You Rather: If you had the choice to flip a coin and get $5 million if it lands on heads, $0 if it lands on tails, or $250,000 if you opt not to flip the coin at all – which would you choose? Please email or message me to let me know your choice! Please let me know if you have a good “Would you rather” question, and we will highlight your submission.

Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at Shmuel@approvedfunding.com.