The 15% Delusion

15%Why does hearing “Save 15%” trigger the human brain to believe that’s a GREAT deal?  Step back and think about this for a second…15% of how much?  15% seems to be the magic number these days, but is it really that significant?

  • 15% of $10 is $1.50 (a 22-ounce bottle of soda.)
  • 15% of $100 is $15 (a movie ticket and a small box of popcorn.)
  • 15% of $1000 is $150 (3 tanks of gas in the standard SUV.)

Okay, so $150 would probably be worth it, but who can’t give up one soda or forego one movie per month and rent Redbox instead?

When I used to wait tables, 15% was the standard tip for really good service.  Today it’s considered an insult in the fine dining world to get less than 18%-20%.  How about insurance?  Saving 15% or more on car insurance sounds awesome until you put some real numbers to it.  If your premium is $300 every 6 months and you save 15%, the savings is $7.50 per month, or 25 cents per day.

Twenty-five cents per day is a great deal?   Really?  How about focusing on the value you receive instead of the incredible amount of savings you’re <NOT> getting?  Would you be willing to pay 25 cents a day for over-the-top, personalized service and technology that saves you time?