Summary
Conditional discounts can backfire when customers face costly requirements to qualify. New research highlighted by the American Marketing Association identifies this “conditional-promotion paradox,” showing that large discounts paired with high precondition costs can reduce total sales. Across five studies, researchers found that consumers who cannot meet the requirements may abandon the purchase altogether. Seeing a steep discount can also make the regular price feel less attractive, further discouraging buyers. Marketers should therefore evaluate discount size and qualification costs together. The research recommends minimizing preconditions or targeting offers toward consumers who can easily meet them, helping brands increase sales without alienating potential customers.
American Marketing Association
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