We’ve all done it. We walk into the grocery store in need of a particular item, and without even thinking, we reach straight for the brand we’ve always used.
Brand loyalty has a powerful hold on consumers. When we’re happy with a brand, where’s the incentive to change?
Providing that incentive is a key marketing challenge for any brand attempting to increase its market share. When dealing with brand-loyal consumers, you must give them a compelling reason to give your brand a try, or they won’t.
A recent online global survey by Nielsen, of 30,000 consumers in 60 countries, found that affordability tops the list of why people try a new product. However, in North America, affordability ranked below novelty and was tied with brand loyalty for second. That finding makes it clear that American businesses must combat strong brand loyalty with incentives that save consumers money and, very importantly, are unique and clever enough to stand out.
That’s where redemption based promotions can be a valuable ally. They provide affordability—and when done right, novelty that draws attention and can be the deciding factor in convincing a consumer to try your product.
Three types of redemption incentives have a proven track record of success—when they’re creative, well-planned, executed effectively, and risk-minimized:
Free Product with Purchase
Everyone loves free, and consumers like having no obligation after the purchase. They simply feel that they’ve saved money. In addition, the offer builds your brand credibility. You’re demonstrating that you believe in your product to the point that you’re willing to give it away in expectation of future sales driven by the product’s quality.
Money Back Guarantees
This offer frees consumers from any risk. If they are not satisfied, they get their money back! As with a free-product-with-purchase strategy, money-back promotions build brand credibility, sending the message that you don’t really expect to give back money because the product is so good.
Coupons are a simple, tried-and-true way to directly address consumers’ affordability concerns. You can compel consumers to give your brand a try if you make the first purchase significantly more affordable than your competitors’ products. Depending on your situation, you may decide to offer a very high percentage discount, or even give away some product completely free without eroding your bottom line profits
Of course, all three types of campaigns involve the decision on how to handle the cost of redemption. That’s why it’s critical to have promotion insurance to minimize the risk if demand is higher than expected, returns are greater than anticipated, some logistical problem drives up costs, or the promotion otherwise becomes more expensive than planned.
It’s also important to have the promotion experience and expertise—whether in-house or from an outside source—to develop creative solutions, assess likely redemption values, manage logistical details such as barriers to claims, fulfillment, and otherwise look for ways to minimize risk. Redemption offers can provide a lot of marketing bang for the buck, but they simply must be planned and managed properly!
I’m a Managing Partner at Insured Creativity.