Friends and Family : How In-Group Focused Promotions Can Increase Purchase

Firms use large majorities of their budgets on sales promotions such as coupons and sales events. Many of these sales promotions are framed as “Friends & Family” or “Preferred Customer.” Which of these frames is more effective, when, and why? We answer these questions building on existing research on deal exclusivity. We show that the success of promotions framed as in-group versus self-focused depends on whether they are targeted toward interdependent or independent customers. We find that interdependent customers are more receptive to in-group focused promotions because they perceive such promotions as being higher-value deals. We also show that consistency with brand personality matters: the benefit of in-group focused promotions for interdependent consumers is higher for brands with a group-oriented personality. Overall, these results show how sales promotions can be more effective without having to increase the magnitude of the promotion