An exploratory study of negative option marketing: good, bad or ugly?

Abstract

Purpose

The purpose of this exploratory research is to determine the consumer's perceptions of negative option marketing (NOM) offers regarding the value and equity of the offer and perceived opportunistic behavior inherent in the offer. In addition, the paper seeks to examine how a negative option offer versus a positive option offer influences consumer intentions to acquire a financial service.

Design/methodology/approach

Using the customer database of a full‐service American bank, a survey was sent to demand deposit account holders. A survey then determined perceptions of the offer, perceptions of the bank making the offer, and intentions to purchase.

Findings

Between the negative and positive option scenario sub‐samples, there were no differences in perceptions of value or equity, except in perceptions of opportunistic behavior – the negative option offers yielded significantly higher perceptions of opportunistic behavior. Perceptions of value, equity, and satisfaction with the offer were the same across all offers. Satisfaction with the offer significantly influenced satisfaction with the firm making the offer.

Research limitations/implications

A negative option operates in a contractual situation. The current research examined only one contractual situation. For findings to be generalized, the research needs to be replicated in other contractual contexts.

Practical implications

Even though the negative option offers were perceived as more opportunistic than the positive option offer, one of the negative option offers yielded a higher intention to purchase than the positive option. Care must be exercised in using NOM to minimize perceptions of opportunistic behavior.

Originality/value

There is limited literature on negative option marketing. No one has studied the customer perceptions of the strategy, in spite of its popularity.

Citation

Licata, J.W. and Von Bergen, C.W. (2007), "An exploratory study of negative option marketing: good, bad or ugly?", International Journal of Bank Marketing, Vol. 25 No. 4, pp. 207-222. https://doi.org/10.1108/02652320710754006