Promotional products vs price promotion in fostering customer loyalty: a report of two controlled field experiments

Abstract

Winning customer loyalty and repeat business and eliminating or reducing their reliance on coupons and other forms of price promotion is the goal of many service businesses today. The effectiveness of using advertising specialties (imprinted items given away for free) and price promotions was directly compared by way of two controlled field experiments involving customers of a Chinese food delivery service and a drycleaner in a major US metropolitan area. The studies used a controlled field experiment with a behavioral measure. The experiments offered support, in the business‐to‐business and consumer settings, that ad specialties can serve as inducements for a larger dollar volume of repeat business than the use of no promotion, and in some cases more than was generated by price promotion. Results suggest that goodwill engendered among customers by the ad. specialty “gifts”, coupled with the repeated brand exposure opportunities afforded by imprinted items, can exert a considerable impact on purchase behavior.

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