Better or Worse? Effects of online promotion habits on customer value: An empirical study |
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| Institution: | 1. Stephen F. Austin State University, United States;2. University of Kentucky, United States;3. The Pennsylvania State University Abington, United States;1. Department of Marketing, Honorary Professor of International Studies, McCoy College of Business, Texas State University, 601 University Drive, McCoy Hall – Office 424D, San Marcos, TX, 78666, USA;2. Department of Mgmt., Mktg., & I.S., College of Business Administration, Sam Houston State University, SHSU Box 2056, Huntsville, TX, 7734, USA;3. Marketing Department, College of Business, Florida Atlantic University, 3200 College Avenue Davie, FL, 33314, USA;1. School of Management, Nanjing University of Posts and Telecommunications, Nanjing, Jiangsu, China;2. College of Business, Shanghai University of Finance and Economics, Shanghai, China;3. Business School, Tianjin University of Finance and Economics, Tianjin, China;1. Aeronautics Institute of Technology - ITA, Praça Marechal Eduardo Gomes 50, Vila das Acácias, São José dos Campos, SP, 12228-900, Brazil;2. Federal University of Goiás - UFG, Faculty of Science and Technology, Mucuri S/N - Setor Conde dos Arcos - Aparecida de Goiânia Campus, GO, 74968-755, Brazil;1. College of Business Administration, Ritsumeikan University, 2-150 Iwakura, Ibaraki, Osaka, 567-8570, Japan;2. College of Commerce, Nihon University, 5-2-1 Kinuta, Setagaya, Tokyo, 157-8570, Japan;3. Faculty of Business Administration, Kanagawa University, 4-5-3 Minatomorai, Nishi-ku, Yokohama, Kanagawa, 220-8739, Japan;1. Federal Institute of Education, Science and Technology of Rio Grande do Sul, Veranópolis, RS, Brazil;2. School of Management, Federal University of Rio Grande do Sul (UFRGS), Porto Alegre, RS, Brazil;3. Massachusetts Institute of Technology (MIT), Media Lab, Sociotechnical Systems Research Center, Cambridge, MA, USA |
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| Abstract: | Online frequent and uninterrupted price discounts easily cause customers to form general tendencies to purchase promotions, or ‘online promotion habits’. Compared with offline promotion shopping, the distinct features of online promotion shopping make customer behaviours highly changeable and leave the effects of online promotion habits on customer value a puzzle. Using a dataset of real transactions from a leading online apparel retailer in China, this study makes continuous observations of customers’ online promotion habits. Drawing on the behavioural learning theory, we empirically investigate the dynamic effects of online promotion habits on customer value. The results reveal that after customers form online promotion habits, their customer value increases significantly. Furthermore, among customers with online promotion habits, online promotion habits exert an inverted U-shaped effect on customer value. Namely, as online promotion habits strengthen, customer value increases accordingly, yet negative outcomes show if online promotion habits exceed a certain level. We discuss the theoretical and managerial implications of our findings, which will enable researchers and practitioners to measure and dynamically manage customers’ online promotion habits. |
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| Keywords: | Customer habit Online promotion Customer value Inverted-U effect Behavioural learning theory |
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