The Conditional-Promotion Paradox: When and Why Conditional Promotions Decrease Total Sales of the Promoted Product

Abstract

Conditional promotions are price promotions that require consumers to meet a precondition to qualify for a discount. While research shows that conditional promotions can increase sales of the promoted product compared with no promotion (i.e., sales at the regular price), this article identifies the conditions under which conditional promotions can decrease sales of the promoted product compared with no promotion. Across five studies, the authors find that conditional promotions with a high precondition cost and high discount are the most likely to decrease total sales of the promoted product. The authors theorize that this decrease occurs because the high precondition cost deters consumers from purchasing the promoted product under the promotion, while the high discount and corresponding decrease in transaction utility deter consumers from purchasing the promoted product at the regular price. These findings contribute to the promotions literature by identifying when and why conditional promotions help or hurt total sales of the promoted product.