Sponsored feature

Can regular discounts drive loyalty as well as opportunistic purchases? The Marketing Society Forum

Starbucks has introduced a 60p discount on lattes bought before 11am on Mondays.

YES - JAMES MURPHY, FOUNDING PARTNER AND CHIEF EXECUTIVE, ADAM & EVE/DDB

If the product being promoted is in a category where consumption is habitual, then regular discount promotion can effect loyalty - and, in many instances, is designed to totally change loyalty.

Categories like food, drink and media have consumption often characterised by inertia or reluctance to try something new, different-tasting or served up in an innovative way.

Regular promotions can chip away at the existing loyalty and inertia - you may not like their brew of coffee the first time, but by the third cup you are hooked.

This is particularly true in categories where consumers take some time to acquire a taste for a certain product.

MAYBE - JEMIMA BIRD, OUTGOING MARKETING DIRECTOR, TRAGUS GROUP (Cafe Rouge, Bella Italia, Strada)

Promotions drive footfall, both new and loyal, and if a loyalty proposition encourages a customer to turn to your brand over another, then this is a win-win.

However, discounts can be horrendously brand-damaging - they drive footfall, but is it loyal? When one brand comes off discount, consumers will simply 'vouchercode' its competitor. It's not so much brandas discount-loyal. Can you afford to continuously seduce a customer knowing they will never pay full price again?

Regular discounts when applied smartly to sub-sections of your offering create the opportunity for impulse and upsell - just don't believe all these customers are in love with your brand.

YES - RUSSELL ABBOTT, MANAGING DIRECTOR, SYNERGIS MARKETING

Everyone is looking to save cash on their regular purchases, particularly in these straitened times, even those previously immune to price offers.

However, the discount is the icing on the cake, not the primary reason to purchase. The offer will help build loyalty only if consumers buy into the brand's values.

Witness Tesco's incredibly successful Clubcard scheme. In essence it is a discount promotion but one that offers several other customer benefits. No one shops at Tesco solely because they get Clubcard points but, every little helps.

However, discounting as a substitute for strong brand values is a recipe for disaster - Comet being a sad example.

YES - SUSAN AUBREY-COUND, CHIEF EXECUTIVE, ECOMMERCE, A&N MEDIA (and formerly of M&S)

Regular discounts can form and reinforce purchase habits and create a variety of emotional loyalties among regular customers.

Once M&S' 'Dine in for £10' became a regular feature, frequent M&S customers revealed a more emotional response - they saw it as an entitlement they had earned.

This can drive strong loyalty, but you need to be very clear about the behaviours the discount is driving, and make sure it has a positive impact on the bottom line.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message