Good cause + moderate discount = more sales

November 11, 2014

Many businesses now offer customers the opportunity to make charitable donations to good causes along with their purchases, but does this really encourage the customer to buy more? According to a new study in the Journal of Marketing, the answer is a firm "Yes."

"The mere presence of a charitable donation opportunity can generate significantly more sales," write authors Michelle Andrews (Temple University), Xueming Luo (Temple University), Zheng Fang (Sichuan University) and Jaakko Aspara (Hanken Swedish School of Economics). "Offering the donation nearly doubled the number of purchases."

With the help of a participating mobile service provider, study authors sent two messages to customers: the first version advertised tickets for a new film at a nearby IMAX theater, and the second advertised the tickets with a note saying that part of the proceeds would go to help low income students pay for college. The results were significant: Those people believing their purchase would help others were far more inclined to make a purchase.

The authors also found that offering a moderate discount along with the charity message resulted in the best sales. A moderate discount made customers feel that they were being taken care of, and that in addition to that the company was making sacrifices for a good cause. If the discount was too great, however, consumers tended to lose focus on the charitable aspect of the sale, and along with it the positive feelings they had had about this good cause.

"A moderate discount may signal to consumers that the firm is acting altruistically by forgoing the opportunity to sell at full price and thereby sacrificing more revenues, thus boosting consumers' warm-glow feelings and consequent purchase likelihood. However, deep discounts may rob consumers of their good feelings and purchase intentions. Managers should consider refraining from bundling donations with deep discounts to avoid depriving consumers of the warm-glow feelings that inspire purchases during donation initiatives," the authors conclude.
-end-
Michelle Andrews, Xueming Luo, Zheng Fang and Jaakko Aspara. "Cause Marketing Effectiveness and the Moderating Role of Price Discounts." Forthcoming in the Journal of Marketing. For more information, contact Zheng Fang (149281891@qq.com).

American Marketing Association

Related Consumers Articles from Brightsurf:

When consumers trust AI recommendations--or resist them
The key factor in deciding how to incorporate AI recommenders is whether consumers are focused on the functional and practical aspects of a product (its utilitarian value) or on the experiential and sensory aspects of a product (its hedonic value).

Do consumers enjoy events more when commenting on them?
Generating content increases people's enjoyment of positive experiences.

Why consumers think pretty food is healthier
People tend to think that pretty-looking food is healthier (e.g., more nutrients, less fat) and more natural (e.g., purer, less processed) than ugly-looking versions of the same food.

How consumers responded to COVID-19
The coronavirus pandemic has been a catalyst for laying out the different threats that consumers face, and that consumers must prepare themselves for a constantly shifting landscape moving forward.

Is less more? How consumers view sustainability claims
Communicating a product's reduced negative attribute might have unintended consequences if consumers approach it with the wrong mindset.

In the sharing economy, consumers see themselves as helpers
Whether you use a taxi or a rideshare app like Uber, you're still going to get a driver who will take you to your destination.

Helping consumers in a crisis
A new study shows that the central bank tool known as quantitative easing helped consumers substantially during the last big economic downturn -- a finding with clear relevance for today's pandemic-hit economy.

'Locally grown' broccoli looks, tastes better to consumers
In tests, consumers in upstate New York were willing to pay more for broccoli grown in New York when they knew where it came from, Cornell University researchers found.

Should patients be considered consumers?
No, and doing so can undermine efforts to promote patient-centered health care, write three Hastings Center scholars in the March issue of Health Affairs.

Consumers choose smartphones mostly because of their appearance
The more attractive the image and design of the telephone, the stronger the emotional relationship that consumers are going to have with the product, which is a clear influence on their purchasing decision.

Read More: Consumers News and Consumers Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.