Discounts and loyalty: a bad match?
November 18, 2011 | Hotel Marketing
The consumer who is interested in your coupon and will actually go out of his or her way to use it is the consumer who will probably never pay full price for your products. Conversely, the consumer who is less sensitive to price is less likely to use your coupon.
Discounts and the instruments that provide them (like coupons) have historically been used to drive purchases by consumers who are more price sensitive.
Put simply, the consumer who is interested in your coupon and will actually go out of his or her way to use it is the consumer who will probably never pay full price for your products. Conversely, the consumer who is less sensitive to price is less likely to use your coupon, so you don't have to lower the prices of your products globally just to sell to this consumer.
From this perspective, the problem with the focus on providing discounts to loyal customers becomes clear: they're precisely the consumers you don't need to discount for! For this reason, brands active online, particularly in the social media space, need to think carefully about platforms that confuse loyalty and discounting. They don't always go hand in hand, and nor should they.
Get the full story at Econsultancy
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