New study finds price discounts may backfire when combined with large donations

Providing consumers the opportunity to feel altruistic by donating a portion of the purchase price to a charity is an effective way for businesses to drive sales, as is providing items and services at discounted prices. However, businesses should proceed with caution when combining these two marketing techniques, as it can have the opposite effect. According to a forthcoming study in the INFORMS journal Marketing Science, offering price discounts can reduce rather than increase sales in cause marketing settings, where firms donate a certain percentage of revenues to a charity. This surprising finding arises because consumers have both an intrinsic motivation to support the charity and a self-image motivation to perceive themselves as altruistic. Large discounts can adversely affect a consumer’s perceived altruistic self-image.