Last night I went to the hairdressers. I paid with a ‘recommend a friend’ voucher; and I left with a 10% off my next cut token. And a few for my friends. The haircut was good – and the fact that I got a good deal made it even better.
The Telegraph recently published a piece on ‘The pros and cons of voucher codes’, exploring the psychology of discounts, and the increasing popularity of online codes, discount boxes and vouchers. It pointed out the ‘thrill of the chase’ satisfaction that we derive from the ‘getting something for nothing’ illusion; and, also, the culture that is growing up around incentivised shopping, an area that we explored in our social shopping research.
Today, shoppers are savvy, resourceful and have high expectations. Whilst The Telegraph points out that the temptation of “discount” can often induce a beneficial flurry of unplanned spending, it also raises some interesting issues about online shopping.
Is discount the only way to gain the competitive edge? And, how do you encourage brand loyalty when the hunting instinct seems to kick in?
Whilst The Telegraph focussed on money-off, our research shows that experiential forms of recognition are equally valued by consumers. Differentiating in ways other than price (i.e. exclusive offers and VIP status) could sidestep the discount culture and support a closer engagement between consumer and brand.
Setting the expectation
As The Telegraph points out, a discount box sets an expectation. If you’re not running a campaign, revise your site – or your customers are likely to feel a little hard done by.
Recommend a friend
Recommendation is one of the strongest contenders to discounts. We like a bargain – but we also buy on trust. Bringing together rewards and referrals is a smart way of ensuring that the satisfaction from the voucher is maximised – and that it spreads.
And if you are offering vouchers…
Make them stand out. Combining social media with vouchers can be a powerful solution reaching a far wider audience. Not only does the viral effect kick in if the voucher is popular; but it provides an opportunity for relationship development that is harder to replicate through random voucher codes.