Promotions: What Wins Over Buyers Doesn’t Always Keep Them

All marketers know that sales, coupons, and other promotions can yield short-term gains. But a holiday 2004 study by ForeSee Results, a Web development strategic firm, confirms that such offers don’t necessarily build long-term loyalty.

Fifty-eight percent of multichannel consumers surveyed said that promotions caused them to buy from a particular company that they would not otherwise have purchased from. Free shipping was particularly effective: 75% of those offered free shipping with their online purchase said that the offer influenced their decision to buy from the particular Website.

But the satisfaction level of and the likelihood of a repeat purchase by customers who were offered free shipping was only marginally higher than that of consumers who didn’t receive free shipping offers.

What’s more, ForeSee found that one-quarter of consumers chose the Web over another channel due to online-only promotions. In a white paper, ForeSee president/CEO Larry Freed wrote, “Retailers may simply be causing customers to switch channels by offering incentives to use the ‘wrong’ channel instead of the customers’ true preferred channel for dealing with the company…which may ultimately lead to lower satisfaction and decreased loyalty.”

As reported by Primedia in Chief Marketing Officer newsletter, January 25, 2005.