After considering the evidence for these, business experts at Texas A&M University, University of Houston, Indiana University, and University of Delaware uncovered another downside: Shoppers who realize they’ve missed the big sale sometimes become less likely to purchase the item at a lower discount offered subsequently.
The important word here is “sometimes.” We’d like to know how to avoid the negatives. Studies at University of Miami and University of Kentucky support use of “steadily decreasing discounting.” Before returning the item to its pre-promotion regular price, offer one or more additional discounts on the same merchandise, each discount at a progressively lower percentage than the deep discount.
This pretty much eliminates customer disgruntlement. But how do we keep shoppers interested in buying the merchandise at the lower discount?
The answer from this more recent research is to place responsibility for having missed the sale firmly on the shoulders of the shopper. Because this is usually how the shopper sees things, steadily decreasing discounts work most of the time. But there are circumstances when shoppers are likely to assign the fault to you for the missed opportunity. They may have come into the store to make the purchase and been told you’ve sold out. They might learn about the discount from a friend and blame you for not having brought it to their attention.
The remedy for the first one is to offer a deep discount on an alternative. For the second, try a technique proven effective when a shopper has any sort of complaint. Conduct the conversation in an area where the shopper can see themselves in a mirror. This leads to the consumer subconsciously considering what part they played in the disappointing experience.
Now please notice the other “sometimes” in the first paragraph. How do we keep a promotional sale from injuring shopper perceptions of item quality or store price image? How do we maintain the revenue stream from repeat purchases of consumables?
The research-based tactics here are to keep most discounts modest and to reserve deep discounts for themed storewide sales held so infrequently that shoppers are unlikely to want to wait until the next blockbuster sale to buy more of the items.
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Follow Big Discounts with Smaller Discounts
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