Shopper incentives – the art and science

By April 13th, 2020

For a while there, clients would ask why we wanted to structure a promotion in a certain way. We’d wave our arms around and talk about the magic and the mystery of how promotions work. The art and science.

Cash is King, we’d always say. Three major prizewinners, a must!

That all got blown to pieces when IMI International started to publish their PromoTrack. It’s very good. It has become a guiding light for many agencies and clients and gives us the confidence to recommend more and better ideas. While the guts of it remain unchanged with some basic rules. Instant wins are good and keep everything simple and give away stuff that people want. We also get new news every time it is published and the latest version (2019) is no different.

The highlights from the most recent report can be partly explained by an evolving consumer attitude – everyone likes promotions more than they used to. And of course, our media consumption has changed – we find out about promotions and engage with them through different media.

The concept of brands offering added value in some form or another as a promotion – whether it is winning the holiday of a lifetime or receiving a free set of steak knives seems to be very much back on the agenda for consumers.

In fact, consumers are actively searching out promotions. We are back on the agenda! People love ’em! And of course, Bamboo is exceptionally good at them…. albeit that wasn’t part of the research!

A budget can go a very long way – don’t spend the whole thing on gifts and prizes – gold, frankincense and myrrh. A well-structured incentive needs to encourage a behaviour and you want to do that for the smallest cost. Why give your consumer a $300 cashback when a $200 cashback will do the same trick.

Cashbacks are often used as a competitive response and it is believed that brands have to match each other. If the competition is offering a $300 cashback, then you must too. This is so evident in the electrical appliance sector. It comes at a cost but the loss of market share that comes from not matching the competition has proved to be so great that you have to be in it and take the smaller hit.

Kellogg’s, many moons ago, used to put little gifts in every pack. Research then threw up the finding that putting a free gift in every 3rd pack of cereal (1 in 3 wins) would have exactly the same outcome from a sale and a consumer engagement perspective. And in practice it was true. It takes a brave marketer to take that risk, but the consumer and retailer remained happy and the promotional premium budget was hacked down to a third of what it was!

So, save your spend by giving away all that is needed to give you a creative hook and an incentive that will drive a sale and then spend the rest of your budget telling everyone about the incentive, amplifying. If we can’t tell anyone about the activity, then it probably isn’t worth undertaking. Luckily social media makes it easier to amplify activities cost effectively.

Long live the incentive – that little something extra!

Source Citation: PromoTrack™

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