However, researchers at McGill University, Konkuk University, and University of Texas at Austin show how setting overly rigid time constraints, using store layouts which impede navigation, or complicating purchase returns will lessen the effectiveness of limited-time offers and might even reverse the positive effects. The more restrictions, the more severe the damage. All this was seen in the consumers’ evaluations of item value and in their purchase intent. Items used in the scenarios included chocolates, headphones, cameras, printers, backpacks, and spa services. The scenarios included store sales and a fundraising offer.
Based on their results, the researchers’ explanation is consumer reactance for this negative effect on limited-time offers of further constraining flexibility. Reactance is a phenomenon which kicks in when people sense that their freedom of choice is threatened. Consumers feel they’d be foolish to pass up the opportunity to save money, but don’t like the accompanying feeling that they’re being pressured to behave according to dictates from the seller.
The researchers recommend that retailers implement limited-time offers in ways which preserve the shopper’s flexibility. Additionally, the researchers make a case for including in the offer pitch a statement which highlights future remorse if the offer is missed. The action imperative of a simple “Buy now or regret it later” counteracted negative results of reactance.
With limited time as well as other restrictions on offers, the order in which you present the components matters. Lead with the bad news, say researchers from Baylor University, New York University, and University of Pittsburgh. “For today only, when you buy three items, 25% discount on the usual price.”
The bad-good order provides the shopper a greater sense of control in the face of hurdles. People generally prefer to deliver good news before bad news. But people like to receive bad news first and finish off with the good news.
Related to this, the discount offer maintains higher salience using the bad news-good news sequence because of its logical if/then flow (if I qualify for the offer, then I get…). The cause-and-effect preference is seen more generally in how consumers most fluently process information from sellers.
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Restrict Discount Offers to After Restrictions
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