“Some would have bought anyway. Others only buy when it’s a deal. Save your money”
It has been my pleasure and privilege over the years to get to know quite a few people smarter than myself and steal their ideas whenever I could understand them.
One of the cleverest was the late Professor Andrew Ehrenberg. He was called by David Ogilvy the finest mind in marketing.
You can read about him in Wikipedia, but if you’re as thick as me you’ll probably be mystified as to what made his work so important.
There are two reasons, the first being that he was a master of statistics, a discipline which rarely inspires the spirit of discovery among laymen.
The other is that what he discovered calls for a fair bit of work to understand and few marketers are inclined to take the trouble. Actually he bemoaned the fact that even among users of statistics very few paid any attention to his discoveries
But here is something he said that may interest you:
Promotions have only a short-term effect, and do not affect a brand’s subsequent sales or brand loyalty. The extra buyers during the promotion have been seen almost all to have bought it before the promotion rather than being the hoped for new buyer.
I met Andrew when I was writing a weekly diatribe in Marketing magazine, and interviewed him three times to see if I could pass on some of his wisdom.
I was particularly interested in the impact of discounts, like the ones referred to in that quotation above. When I quizzed him about it he suggested that almost all buyers of discounted goods fall into two categories.
The first one describes my partner perfectly. She has been busy buying all her Christmas presents during the great Black Friday ballyhoo. She is one of those who would have bought anyway, but always waits till the offers arrive.
The second is those cheapskates who only buy when there’s a deal. That describes me, pretty much.
I recall two remarks apropos what you have just read.
One I heard many years ago in Kyoto where I was taking part in American Express planning meeting. Also present was Lester Wunderman – the man who coined the phrase Direct Marketing. I recall him saying, on the subject of discounts, “You are training your customers to expect bribes.
The other was Andrew’s reply when I asked, “What do you do when your competitor is running promotions and you feel you should respond?”
He wrote back: “Save your money”.