Promotional pricing and why it makes us feel good?
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What promotional strategies are effective on Cyber Monday?
Breakfast Business with Enterprise Ireland on Newstalk.
with Susan Hayes-Cullerton in for Joe Lynham today. Well, we had Singles Day in Asia, Black Friday all over the world last Friday. We had Small Business Saturday in Mayo and today is Cyber Monday. It's a day for businesses to offer all sorts of sales.
How do discounts influence customer behavior and emotions?
But the question is, how should business leaders know what kinds of promotions work best and what are the pitfalls that they should be hoping to avoid? So with me now to take us through all of this is Jenny Miller, CEO of Untapped Pricing. Good morning, Jenny. Good morning. Well, Jenny, I was looking at the Black Friday sales data and Salesforce found that online Black Friday US sales grew 3% to $18 billion. Shopify's offline sales data collected from its point of sale channel saw 26% growth year over year in the US. How are customers reacting behaviourally to price promotions?
Well, I think discounts don't just change the price. They change how we feel. So when we spot a good deal, our brains give us that little dopamine hit and we think we're getting something for less than it should cost.
What are the risks of extending promotional periods like Black Friday?
And perhaps a bit of FOMO as well. Fear of missing out.
Exactly that. So Black Friday in particular turns shopping into a game. So you've got those countdown clocks, limited stock, early access codes. And that all plays into our fear of missing out and I think nudges us to act quickly, especially when everyone's talking about those bargains and we don't want to be the only one paying the full price later.
But also, I must ask, Black Friday used to be a Friday and now I've certainly seen things to do with Black Friday deals being offered long before. So some might argue that if the deals go on for long, they kind of lose their urgency and appeal. What do you think?
Yeah, I think the Black Friday period has extended and extended as retailers are trying to reshape what the promotional period means for them.
How do promotions affect long-term customer value perceptions?
And how can promotions then shape customer expectations and particularly value perceptions long term?
Yeah, so I think promotions don't just move when we buy. They can reshape our sense of what things are worth. So let's say we see our favorite trainers at 75% off in November, then paying full price for them in February is suddenly going to feel like you're being wildly overcharged and we start to resent paying that much. So I think if brands discount too regularly or for extended periods of time, especially on products that were selling just fine, customers can start thinking the original price is never fair. And that's when you start to get some long-term damage to brand trust and value perception.
But also too, Jenny, since we have as much data and comparison websites, et cetera, at our fingertips today, Is there a sense then that people can also feel, well, is this really 75% off? I mean, if I looked at this three months ago, is it really 60% off? Do you think that retailers, through experiences like Black Friday, are they positive or negative over that brand trust sort of experience?
Yeah, so I think some discounts are absolutely as they seem, but others sometimes they aren't. So retailers can make a discount look bigger sometimes, by briefly inflating the original price or using up to X percent of savings. So the deepest discounts apply to very few items. But my advice is quite simple.
What common marketing mistakes should businesses avoid during sales?
Check the price history, look across retailers and really focus on the products that you'd buy anyway. So you can avoid those hype traps.
And that's very useful advice from a consumer perspective. But from a business perspective, what do they need to do or not to do? What should they be avoiding either in terms of marketing mistakes?
So there are a few pitfalls that we see every year. So I'd say the biggest one is training customers to wait for a deal. So if you go too big every November, people will delay buying and only show up when everything's on sale. So either you attract discount only shoppers who won't be back until the next sale or Black Friday ends up shifting the time of purchases.
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Chapters
7 chapters
1
What promotional strategies are effective on Cyber Monday?
0:01–0:22
2
How do discounts influence customer behavior and emotions?
0:22–1:14
3
What are the risks of extending promotional periods like Black Friday?
1:14–2:14
4
How do promotions affect long-term customer value perceptions?
2:14–3:59
5
What common marketing mistakes should businesses avoid during sales?
3:59–5:27
6
How can retailers build trust through loyalty schemes?
5:27–6:44
7
What practical advice should consumers consider during sales events?
6:44–8:53