Promotional offers are often in the form of a “Good news/Bad news” statement with the offer or “good news” first and the restriction or “bad news” second. This format can cause inconvenience and irritation to potential buyers. It can also lead to a lack of trust. Changing the format to “Bad news followed by good” improves sales by making customers feel rewarded, in control of the offer, and treated with transparency.
Promotional offer statements often have a dual structure—the offer or discount, which is the “good news” for shoppers, and the restriction or condition on the offer, which is the “bad
news”. For example, “Get 20% cashback (when you shop for ₹5000)”. Retailers usually follow a “good news first, then bad news” structure to attract potential shoppers. However, this practice is intuitive rather than evidence-based. So, a study examined customer preferences to answer the question: Which structure is more effective at improving sales—good news followed by bad OR bad news followed by good?
The study found that while sellers prefer to present the offer first, buyers prefer to come across the constraint first. Buyers’ preference for the bad news first is based on the human
tendency to want things to improve. As “news” receivers, buyers like to hear the bad news first and then the good news so that they can begin with a loss and finish with a gain. It makes them feel more in control of the offer as they have all the information needed to decide whether to opt for it or not. The offer thus becomes more gripping for them.
Buyers also perceive the restriction or condition as an irritant and the offer as a reward.
When the promotion suggests they can get the reward only after crossing a hurdle, buyers can feel discouraged or irritated. They can see it as an inconvenience. Instead, when the promotion suggests that the offer is a reward for what they have already spent in the store, it gives shoppers greater pleasure to avail the offer, which increases the offer’s attractiveness for them.
Presenting the restriction first also comes across as being fairer, especially since the
restriction is often mentioned in “fine print” on promotional material in current practice. A buyer might not notice the condition and try to avail the offer only to find out at the point of sale that they need to spend more to do so. They are then left with the options of spending more than expected or not availing the offer, both of which can cause irritation and dissatisfaction. Therefore, the “Bad news followed by good news” structure, which feels more honest, increases their chances of availing the offer.
The study has relevant implications for retailers planning their promotional strategy. While
promotions with restrictions are unavoidable due to limitations of inventory, pricing, or space, turning off customers due to conditional offers is definitely avoidable. Retailers using conditional promotional offers can get around the possibility of irritating customers by mentioning the “bad news” or restriction first. Reframing the offer would lead to higher response rates during the promotion and also give shoppers a sense of being rewarded for being a buyer, which could affect long-term relationship.
The “Bad news/Good news” format also increases customers’ trust and perceived fairness,
which is another incentive for retailers to use it. In a heavily competitive market, it is critical for firms to retain the trust of customers and maintain a clean image. Customers often distrust marketing tactics and sales advertisements. In fact, over 66% of customers do not trust brand advertising in general. To reassure customers of their honesty and transparency in such an environment, retailers can rely on reframed offers.