Abstract

Proximity-based geotargeting of same-day mobile coupons (m-coupons) has become a valuable part of companies’ marketing communications. However, this strategy is ineffective at eliciting redemptions from non-proximal consumers, due to the negative effect of consumers’ momentary distance from the offline point of sale (POS). Therefore, the size of the addressable consumer population is bounded. We propose a novel solution that harnesses m-coupon characteristics to increase their redemption likelihood for non-proximal consumers. Importantly, our method nei-ther requires the collection of additional contextual data nor investments in specialised IT capa-bilities. Utilizing social m-coupons that can only be redeemed in a group of multiple consumers, we turn each redemption into a joint consumption decision. Social m-coupons foster peer influ-ence and provide additional utility to consumers by encouraging social interactions with their peers. We test the effect of joint consumption on consumers’ m-coupon redemption likelihoods in a randomized field experiment in cooperation with a large metropolitan movie theatre. We find that social m-coupons have a positive direct effect on redemptions and also reduce consumers’ sensitivity to their distance from the movie theatre. The effect of social m-coupons is comparable in magnitude to the effect of increasing the discount from 1€ to 3€.

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