Customer Acquisition Promotions and Customer Asset Value

For your marketing

Possible founder application

Compare the long-term value of discounted and full-price cohorts, accounting for selection and acquisition cost. A lower initial conversion cost can bring customers with weaker repeat economics.

Reported result

What the study found

In both datasets, deeper acquisition discounts were associated with lower repeat-buying rates and lower customer asset value. The abstract reports that customers acquired with a 35% discount had about half the long-term value of customers acquired without a promotion.

Research question

What the authors investigated

How do acquisition discounts affect the mix and long-term value of customers a firm acquires?

Design

A conceptual model of customer uncertainty is paired with customer-level empirical analyses from a newspaper and an online grocer.

Sample and setting

Customer data from one newspaper and one online grocery retailer; the abstract does not state sample sizes.

Scope and transfer

Limitations to keep in view

Two businesses in newspaper and online grocery markets; the value gap is not a SaaS acquisition benchmark. The abstract describes empirical relationships and does not claim randomized discount assignment.

Research sources

Journal of Marketing Research publisher abstract; industry contexts and headline relationship are reported there.