December 6, 2012
According to a paper in the Journal of Marketing, consumers have a highly skewed perception of promotion value when percentages are involved in the offer and messaging, and it’s something that marketers can leverage to increase sales.
The Less Is More: The Impact of Base Value Neglect on Consumer Preferences for Bonus Packs over Price Discounts report by researchers from the University of Minnesota reveals that these tangible and intangible increases can be applied to price or any other type of percentage-based offering, and the results are the same — the larger the percentage, the bigger the response.
Taking a closer look at the research data as it relates to pricing promotions, the root cause is the perceived deal consumers think they’re getting based on the percentage off which they receive in discount promotions. One of the key pieces of evidence in the report showed that a “bonus pack” which was promoted as including 50% more of the product outsold the same product promoted with a 35% off price discount by 71%.
Furthermore, stacking discounts also improves sales more than offering a single larger discount. For example, a “take 25% off of the price which has already been reduced by 25%” is more effective than offering the same discount as a single percentage off.
The percentage perception always skews toward the larger percentage — whether that percentage is a discount or an added benefit. A “25% discount” promotion won’t be received as well by consumers as a “get 50% more product” promotion will. The lesson marketers from this research is that you can massage any promotion into one that includes messaging focused on a large percentage to pique consumers’ interest and their motivation to buy.
In terms of non-price implications, the study authors offer some simple examples:
“For example, firms promoting health-related claims can highlight the increase (e.g., of 50%) in package size (12 oz. bottle) for the same calorie count (100 calories) rather than the equivalent decrease (e.g., of 33%) in calorie count for the same package size. Similarly, firms emphasizing speed, such as quantity of data transferred per time interval (e.g., SanDisk USB drive with read and write speed at 30 MB/second), product delivery (e.g., UPS delivers a package within two business days), response to product failure (e.g., Xerox technicians arrive on-site within 24 hours from the service call), product efficiency (e.g., Whirlpool’s washing machine finishes one normal wash cycle in 30 minutes), or travel services (e.g., United Airlines flies from San Francisco to Sydney in 15 hours) can highlight improvements that emphasize the increase in speed (e.g., of 25%) rather than the equivalent decrease in time taken (e.g., of 20%).”
Keep in mind, the study authors point out that bonus pack preference is strong but not universal. Choosing between offering consumers a price discount or a bonus pack promotion depends very much on the brand’s market, competitors, and target audience. It’s up to the marketer to understand all three and make the right decision to position the brand against competitors and boost sales through short term price discount or bonus pack promotions.
Image: Ayhan Yildiz
September 8, 2012
A new study by RevTrax reveals some interesting statistics related to the relationship between consumer demographics and digital coupon conversion behaviors. The researchers studied millions of digital coupons used to drive in-store sales and cross-referenced that data with coupon activation rates by age, income, education, location, and more. Several key demographic groups demonstrated significantly different digital coupon in-store conversion rates than other groups.
Some of the findings from the study include:
Older consumers are more likely to use digital coupons. “On average, a 10% increase in median age yields a 2.49% increase in activation rates for retail coupons in urban U.S. counties. Increased median age also correlates with higher activation rates for retail coupons when compared to CPG coupons (whether urban or rural).”
Millenials are least likely to use digital coupons. “On average, a 10% increase in people ages 15 to 24 resulted in a 1.20% decrease in activation rate for retail coupons in urban U.S. counties and a 1.35% decrease in activation rate for retail coupons in rural U.S. counties.”
Consumers with higher incomes are more likely to use digital coupons. “On average, a 10% increase in median income yields a 1.59% increase in digital coupon activation rates for retail coupons in urban U.S. counties. Increased median income also correlates with higher activation rates for retail coupons when compared to CPG coupons (whether urban or rural).”
Consumers who are employed are more likely to use digital coupons. “On average, a 10% increase in unemployment rate yields 0.46% decrease in activation rate for both CPG coupons in urban U.S. counties and CPG coupons in rural U.S. counties.”
Consumers with a college education are more likely to use digital coupons (in urban U.S. counties). “On average, a 10% increase in bachelor’s degree percentage yields a 0.70% increase in activation rate for retail coupons in urban counties and an extra 0.18% increase in activation rate for CPG coupons in urban counties.”
Women are more likely to use digital coupons than men (in urban U.S. counties). “On average, a 10% increase in the number of males per 100 females yields an 11.86% decrease in the activation rate for retail coupons in urban counties and a decrease of 2.46% in activation rates for CPG coupons in urban counties.”
RevTrax expects that the data revealed through this study will help brands and retailers better understand the relationship between coupons and consumer behavior and the need to align digital advertising with both ecommerce marketing budgets and brick and mortar budgets. Of course, this makes complete sense. A fully integrated marketing plan is always the most powerful marketing plan.
What do you think?
Image: Ayhan Yildiz
June 5, 2012
Google Street View is a handy tool that lets you explore places around the world through 360-degree street-level imagery. But when Google Street View debuted in Belgium last year, there was a problem. Many streets in Belgium are too small for a car to navigate. Therefore, Google Street View had gaping holes of missing content in Belgium. Google needed to fill those gaps.
Toyota iQ is a tiny car as you can see in the above image. The Happiness Brussels agency saw an opportunity to promote the Toyota iQ while solving Google’s problem at the same time. Toyota iQs were fitted with 360-degree cameras and equipment to record the narrow streets that Google’s cars couldn’t.
A special iQ Street View website launched where consumers were asked to add streets that hadn’t been captured by Google Street View yet, and the Toyota iQ would go out and capture them. People could also view tagged streets on the iQ Street View site and sign up to test drive the Toyota iQ. The site also includes a video that shows the Google Street View and Toyota iQ story. You can watch it below.
But that’s not all. People who live on the narrow streets tagged on the iQ Street View website will be mailed special offers for the Toyota iQ. There is no doubt that the people who live on those streets are a perfectly targeted audience for the iQ.
This is a great example of out-of-the-box creative thinking that brings two strong brands together for a cross-promotional opportunity that benefits both of the participating brands and consumers. What do you think? Leave a comment and share your thoughts on the Google Street View and Toyota iQ cross-promotion initiative.
March 28, 2012
Wildfire is a leading social media marketing software company that’s well-known for its Facebook tools which make it easy for brands to hold contests and promotions on their Facebook Pages. Wildfire also offers tools that integrate social media promotions with Twitter, and LinkedIn, and this week, the company announced it now offers its enterprise and consumer brand customers the ability to hold video contests on YouTube, too.
Wildfire’s customers include well-known brands like Mercedes-Benz, Sony, and Dairy Queen, and each of these companies has leveraged Wildfire’s Facebook promotional tools to run video contests on their Facebook Pages. In fact, throughout 2011, Wildfire helped brands run over 7,000 video contests, but none of them could be run directly through YouTube. Wildfire’s new YouTube integration makes it easier for brands to engage with consumers directly on the most popular video site in the world — YouTube.
Brands can run independent contests on both Facebook and YouTube through Wildfire now, or they can link a single contest across both sites. Wildfire offers the following tips for brand video contests:
- Show sample video entries to potential contestants: Instead of describing in words what users should submit, show them an example in an easy-to-follow video.
- Invest in relevant prizes that are highly appealing: Loyal customers are most likely to submit video entries, so be sure to reward them with prizes that are relevant to the brand.
- Make it easy for people to create video entries: The easier it is for people to create video entries, the better. Don’t include requirements related to locations, props, editing, and so on that can reduce entries and contest buzz significantly.
AdWeek reports that Wildfire is already working to add more features to its YouTube promotional offerings, particularly YouTube’s mobile opportunities. Considering Wildfire has 13,000 paying customers, which includes 30 of the top 50 brands on Interbrand’s 2011 list of the best global brands, you can bet you’ll be seeing a lot more brand video contests on YouTube this year.
Have you tried video contests to promote your brand? Wildfire reports that the 7,000 video contests brands ran on Facebook in 2011 using its tools generated 6.5 million visits. Since video is the heart and soul of YouTube, engagement and results are expected to be even higher for video contests that run directly on YouTube. Will you give it a try for your brand? Leave a comment and share your thoughts.
Image: Kriss Szkurlatowski
February 3, 2012
Quick response codes (QR codes) are becoming the norm in print advertising, and according to a report by mobile marketing firm Nellymoser, approximately 4,500 QR codes appeared in the top 100 magazines during 2011.
Those QR codes appeared in a mix of ads and editorial pages, but advertisers are definitely the ones leading the print magazine QR code trend.
Nellymoser found that women’s magazines are the most popular place for QR codes with the top magazine titles for QR code use ranking as follows:
- InStyle = 141 QR codes
- ESPN The Magazine = 136 QR codes
- People = 136 QR codes
- Self = 126 QR codes
- Entertainment Weekly = 123 QR codes
Between January and December of 2011, QR code usage in magazine advertising jumped by over 122% from 3.6% of ad pages to 8% of ad pages. Most of those QR code ads are from the beauty, home, and fashion categories according to Nellymoser. The top brands using QR codes in magazines during 2011 were:
- John Frieda = 82 QR codes (beauty industry)
- L’Oreal = 79 QR codes (beauty industry)
- Cuisinart = 74 QR codes (home industry)
- Garnier = 72 QR codes (beauty industry)
- Revlon = 67 QR codes (beauty industry)
Nellymoser also reports that the more QR codes that are in a magazine, the higher the overall scan rates, and QR codes that include a message describing the benefit consumers get when they scan them receive higher scan rates than stand-alone QR codes. These are useful findings for brands looking to engage with consumers via print ads. Including an ad with a QR code in a publication that already has many advertisers who use QR codes is a better choice than being the lone QR code advertiser in a magazine.
This is a situation where consumer behavior simply makes sense — common sense. Once a person takes her mobile device out to scan one QR code, it’s a lot easier to keep on scanning. That’s one less hurdle for the advertiser to have to navigate in its effort to connect with consumers. Add a compelling message alongside the QR code, and that advertiser stands a much better chance of driving scans and conversions.
What do you think about QR codes in magazines? Are you using them to promote your brand yet? Have you ever scanned one? Leave a comment and share your experience from the brand and consumer side.