Do you ever buy customers with promotion dollars? Do you
spend very much? When you see unfamiliar faces mixed in with
your regular customers, do you ever wonder what kind of
customers they are? Whether they'll become regular and
loyal? After all, you're paying good money to attract them.
Kirk Wakefield and Jeff Barnes, from the University of
Mississippi, recently took a hard look at customers attracted
by promotions, and their findings may give you pause. They
may not be worth the price you pay for them.
Wakefield and Barnes examined patrons attracted to promotions
at minor league baseball games and compared them to regular
fans. The promotions on the nights they studied included a
fireworks display, a pennant giveaway, and an explosive stunt
called the "Dynamite Lady." These promotions were intended
to add emotional value to the overall entertainment
experience, rather than to help people enjoy baseball or
reduce their ticket prices.
Minor league baseball is a leisure service, like an amusement
park or a movie theater, and people use discretionary income
to pay for admittance, so owners prefer not to call attention
to admission prices in their promotions.
Wakefield and Barnes found that approximately 55% of the
audience at these games were regular fans, and would have
attended regardless of the promotion; 11% would not have
attended without the special event, and the remaining 34%
were influenced to some degree.
People most likely to respond to the promotion scored high on
a measure of variety seeking. They looked for special
promotions to guide their entertainment choices and weren't
likely to come again unless another special attraction lured
them to come. They also tended to regard ticket prices as
too high, and to doubt the value of this leisure experience.
People scoring high on a measure of loyalty were regular
fans, and they were not influenced by the promotions.
Indeed, many of them were irritated by these efforts to
attract people who lacked an appreciation for the game. They
also felt some of the attractions distracted from their
enjoyment, for example, female fans failed to get much
entertainment from "Bikini Night."
Loyal fans also felt the ticket price was fair and
represented a good value, but they tended to gauge value on
the physical environment, such as rest rooms and seating,
rather than on promotions. Variety-seeking patrons, people
unlikely to return, cared little for the physical setting.
Wakefield and Barnes believe promotions train a segment of a
leisure market to patronize infrequently, only when an
attractive promotion is offered. They also believe that
enhancements in the service environment improve people's
estimates of value. So improving the facility will lead
people to believe that the ticket price is a good value, and
this should increase the number of people who become regular
customers. The researchers found that value assessments were
the driving force behind decisions to come again.
The choice for leisure retailers is clear, say the
researchers. They should hire carpenters and plumbers to
renovate the rest rooms rather than pay pyrotechnists to set
off explosives.
Still, it is enticing to see customers pour in, even if only
for one night, so Wakefield and Barnes have a suggestion.
Design promotions to enhance the enjoyment of the primary
service experience, so loyal customers get to experience more
of what they want, and variety-seeking customers get to
experience the primary service more fully. For example, a
restaurant could give away two free meals to every tenth
customer on their next visit. This promotion would bring
customers back with a friend to select your most expensive
(and best) entrees.
Reference: Wakefield, Kirk L., and James H. Barnes (1996)
Retailing Hedonic Consumption: A Model of Sales Promotion of
a Leisure Service. Journal of Retailing, 74 (4), 409-427.
Customer Psychology Findings, by James Larsen, Ph.D.
Buying Customers
Researchers find a problem with entertainment promotions and suggest a way to correct it.