FBA SEMINAR SERIES

The Token-Effort Effect: How Minimal Redemption Effort Increases Price Promotion Effectiveness Over Straight Discounts

Prof. Kuangjie ZHANG, Associate Professor, Nanyang Technological University

 

Date:         12 October 2022 (Wednesday)
Time:         10:30am – 11:30am
Venue:      Online via Zoom
Host:          Prof. Kao SI, Assistant Professor in Marketing
Online registration: https://umac.au1.qualtrics.com/jfe/form/SV_5nmrqVevW3YfLDw

Registration deadline: 10 October 2022

Abstract

This research documents how introducing redemption tasks requiring a token amount of effort (i.e., minimal)—for instance, by asking the consumer to enter a promo code or solve a CAPTCHA to receive a discount—increases price promotion effectiveness compared to equivalent straight discounts (i.e., applied automatically). A series of studies, including a field experiment, provides robust evidence for the beneficial effect of token effort requirements on redemption rates. We further show that this effect only occurs when the redemption task requires token-type effort but not when it is effortful. This research offers a costless and easy-to-implement strategy for companies to improve price promotion effectiveness.

 

Speaker

Prof. Kuangjie ZHANG is Associate Professor of Marketing at Nanyang Business School. He received his PhD in Marketing from INSEAD. He also received a BA degree in Economics and a BSc degree in Psychology (double major) from Peking University in China. His research interests focus on pricing and numerical cognition as well as the domain of hedonic and experiential consumption. He is also interested in topics such as brand perception, prosocial behavior, and health communication. His research has appeared in leading academic journals (e.g., Journal of Consumer Research, Journal of Marketing Research, Journal of Marketing, Journal of Consumer Psychology, Organizational Behavior and Human Decision Processes, and Journal of Experimental Psychology: General) and managerial publications (e.g., Harvard Business Review).

 

All are welcome!