January 27, 2020
Promotions are important. Not only do they accommodate a variety of objectives, but they can boost revenue, loyalty and repeat spend.
The ROI benefits of promotions can be significant, specifically for rewards:
You know that financial results are important, but getting more bang out of your marketing bucks requires a strategy that considers all marketing objectives. Let’s look at how marketers build successful promotions from the ground up.
What’s important to other marketers when evaluating different promotional types? The Aberdeen study highlights the top four criteria marketers evaluate:
Naturally, fostering customer engagement is most important. Minimizing lost potential revenue ranks second, which is directly connected to the fourth-ranked factor: driving buyer purchase intent. It’s the classic trade-off: discounting means sacrificing potential revenue in order to create more demand.
Some brands maintain a premium image by rarely—if ever—discounting products. Ranking third in marketers’ criteria, the careful balance between increasing sales and maintaining brand image is an essential consideration.
So, when do rebates win out over discount-based promotions? Marketers told us their priorities:
Simply put, rebates beat instant discounts when you want to drive purchase urgency, improve sales lift, maintain brand image and offer competitive pricing. How do rebates deliver these benefits?
If you use rewards-based promotions, you can choose to require validation (like rebates) or not (think buy one, get one). When requiring validation, marketers surveyed said their top reason (39%) was to collect more customer data to enrich account data. Why? With more data, companies can flesh out buyer personas, better understand purchasing habits and personalize future interactions. Other reasons marketers opt for validation include:
Ultimately, the validated rebate provides opportunities for additional customer touchpoints. “We’re processing your reward request” and “Your reward is on the way” emails deliver proactive updates that help keep your brand top of mind. And, when the reward is also branded—either a Mastercard prepaid card or your own gift card—that’s just another way to encourage a repeat purchase.
Understanding how effective marketing promotions campaigns are built from the ground up doesn’t have to be complicated. The financial benefits are pretty straightforward. From there, it’s up to marketers to decide what matters most in terms of preserving brand image, meeting customer expectations, competing on price and increasing sales lift. Priorities may shift from program to program, but it’s clear that rewards-based promotions—and their benefits—certainly have an important place in a marketer’s toolkit.