Unpacking the Behavioral Dimensions of Promotions and Sales Performance

Abstract

Monetary and non-monetary promotions can be effective in different sales performance metrics but may not last after the post-promotional period. Breaking down promotions into their typologies, dimensions, and performance metrics can clear up the cloudiness of promotional effectiveness. The study investigates the dynamic effect (immediate and short-term) of the behavioral dimensions of promotions (presence, duration, simultaneity, and removal) on sales performance metrics (revenue, number of transactions, and average billing size). The authors conducted longitudinal research at a retailer. The results show that non-monetary and monetary promotions generate immediate and short-term positive effects on revenue and the number of transactions with a positive balance after their ending. Nevertheless, the monetary one harms the average billing size after the promotional period, and the mixed one has opposite effects to the results above. The operant behavioral economics framework helps explain the results by proposing mutually reinforced relationships between consumers and companies.