November 17, 2021 RAVEN5
Consumer promotions are marketing techniques that help entice customers to purchase a product or engage a certain audience. Consumer promotions are usually set for a particular time and used to achieve a specific purpose such as introducing a new product, increasing brand awareness, moving product and attracting new customers. Here are a few promotional techniques commonly used.
Contest Marketing or Sweepstakes Marketing
Contests and sweepstakes are two forms of sales promotions that attract consumers by offering them the chance to win a valuable prize. Sweepstakes and contests allow marketers to engage and gather a better understanding of their target market. This puts out a positive image of the company and its products while introducing it to new prospects and rewarding existing consumers at the same time.
With the rise of social media, contests and sweepstakes encourage people to talk about your company and its products, making them a cost-effective way to extend your marketing and advertising reach. Some consumers may have never heard of your company before, contests and sweepstakes provide companies the opportunity to build brand awareness, essentially putting your name front and centre. Marketers usually ask entrants to consent to marketing communications or in other words sign up for their newsletter or mailing list when entering the contest or sweepstakes, new emails mean potential consumers in the long run. For more information on Contest and Sweepstakes marketing check out our Contest Marketing Whitepaper.
Sampling and Influencing
A free sample is a portion of a product given to consumers at no cost with the goal of driving product adoption. A “freebie” might be given to consumers in shopping malls, supermarkets, retail stores and direct marketing mailings to acquaint the consumer with a new product and encourage trial. Ultimately the goal leads to the purchase and regular use of the product while building consumer marketing lists. Some product sample offers may require consumers to complete a survey or refer a friend to qualify for the freebie and when all requirements are fulfilled, the product samples are shipped to the consumer. Not unlike the days before the internet, consumers still trust word of mouth and that still influences their purchasing decisions. However, with the way we consume content nowadays and the birth of “influencers” we trust these new age spokespersons and now allow them to influence our purchasing decisions. Brands will often connect with an influencer and provide them with product to showcase to their audience for negotiated terms depending on the type of influencer. A micro-influencer might just get to keep the free product whereas a major celebrity influencer might command a huge fee.
The use of rebates is used heavily in retail stores and can be appealing to price-sensitive consumers by increasing their willingness to pay. Especially if there’s been a recent price increase, a product is going to be discontinued soon or to simply stimulate sales without having to give a discount up front. For example, a consumer could get $60 back on their purchase of 4 new tires today at full price. Of course, it means the consumer now has a bit of work to do in terms of collecting the required receipt or UPC and completing a form to mail-in. Thankfully most rebates can now be redeemed online, simply fill out a form and snap a photo of your receipt and you’re done. Although it might be weeks before they see that $60 back but at the end of the day the consumer saved money if even giving up a little bit of their own time to do so. All while thinking about your brand throughout the journey. Much like coupons, there’s always a chance that a consumer is going to forget to redeem. It’s hard to get a firm number on redemption rates as many firms don’t release or are not required to but it can be as high as 70% or as low as 2%. In 2005, half of the 100,000 new TiVo subscribers did not redeem their $100 rebates, allowing the company to keep $5,000,000 in additional profit.
Buy now, pay later
Since the dawn of retail, layaway plans have allowed consumers to pay for their purchases, such as holiday gifts over time instead of putting it on a credit card. However, many retailers have done away with or scaled back these programs. The reason is because of the new option of buy now, pay later plans through 3rd party providers like Affirm, Afterpay, Klarna, Sezzle and Paybright. These plans are particularly attractive to younger shoppers who don’t often use credit cards including Gen Z and millennials that might not have all the funds available now but can now split it over several paycheques. Plans differ from the number of payments to specific terms, but the similarity is that they’re all equal payments spread over a short period of time such as pay in 4 (bi-weekly), pay over 6, 12 or 24 months with no other fees or interest. Affirm allows for payment totals as high as $17,500 which has proven to be important for Peloton’s success as 30% of Affirm’s first-quarter 2021 revenue came directly from Peloton’s website. Buy now, pay later is the fastest growing e-commerce payment method globally. In 2019, the $60 billion buy now, pay later market represented 2.6% of all global e-commerce transactions. In North America, it makes up less than 2% of sales. Marketers are estimating that a Buy now pay later option increases retail conversion rates 20% to 30% and lifts the average cart size between 30% and 50%. Incorporating this into your e-commerce website or store is relatively easy and allows for consumers to be approved to buy your products instantly. (link: https://www.cnbc.com/2021/09/25/why-retailers-are-embracing-buy-now-pay-later-financing-services.html)
Loyalty marketing is an approach whereby a company focuses on growing and retaining existing consumers through incentives and rewards. Whether or not you currently have a loyalty program that encourages your customers to return and conduct more business with you, statistics clearly show the importance and impact of a successful customer loyalty program. Customer loyalty is important because it increases share of wallet, word of mouth referrals, and customer trust. Your existing customers are the biggest source of revenue for your company, so increasing customer loyalty is key to improving your business’ bottom line. Here are a few ideas to turn your happy customers into loyal brand evangelists.
No matter which Consumer Sales Promotion technique is right for your brand right now, RAVEN5’s Contest Marketing platform is a perfect fit for brands and consumers alike. Contest and sweepstakes marketing provides the ability to increase awareness, build excitement around your brand, generate leads, gather consumer data, and provide a coupon or offer.
November 12, 2021