Why Your Clients’ Promotional Campaigns Must Deliver Value

promotionalcampaignsmustdelivervalue

If your clients are selling consumer packaged goods like household cleaners or flavored potato chips, what advertising format will yield the best ROI? In the past week, we highlighted a study that indicated using influencers isn’t highly effective for some products. New research from Quotient reveals that emphasizing specific elements of a digital promotion pays big dividends. To succeed, your client’s promotional campaigns must deliver value.

Promotional Campaigns Must Deliver Value

In their comprehensive analysis of over 100,000 promotions, Quotient analysts have learned what marketers should do to maximize return through “activation and redemption.” Promotional campaigns usually include some form of a discount or rebate. And while printed promotional items like coupons remain popular, marketers are also using apps and digital coupon codes.

To understand what drives consumers to take action on a promotion, researchers considered campaign elements such as category and scale. Your clients must properly target their audience. For example, it will not be fruitful for them to promote their new dog food to consumers who don’t own or plan to get a dog.

Depending on the size of the client you’re serving, the scale of the campaign may be local or national. Quotient’s study results indicate that on a national level, consumers were most likely to respond to promotions for “beverage, food and health care” products. In these cases, consumers may use coupons from a digital app to purchase a new health care product they’re interested in.

Your clients can also choose to use a shopper marketing campaign. When a consumer is in the store and is made aware, through a mobile device or signage, of an offer, they’ll take action. This is an especially effective marketing tactic for “personal care, household and pet care” products. 

Measuring Value

Consumers are always calculating whether a promotion is a good deal. Savvy consumers put your clients in a tough position. As Quotient analysts point out, “When designing promotions, advertisers must strike a balance between an effective discount that is compelling enough to convince the consumer to redeem the offer while still being efficient enough for the advertiser to run.” The target customer is considering how important the product is to them, along with how much they must buy to qualify for the discount. As the value of an offer declines, so does the redemption rate.

If the consumer must purchase three or more of a product in order to qualify for a discount, they’ll be more likely to do so for a shelf stable item. Your client may want to use this strategy to ensure that their customer grows accustomed to using the product and will purchase it when it's time to replenish their supply.

When consumers perceive a 50% discount on a product they’re interested in, your clients can count on a 14% redemption rate. On the other hand, a 10% discount will yield about a 4% redemption rate.

And while we’re on the topic of the language to use in describing value, should your clients tout discount in dollar amounts or percentages? Do consumers like the sound of $5 off or does the term 30% off work better? It turns out consumers don’t want to do the math. They might not be sure of the exact percentage discount when a $5 off promotion applies to a product that normally costs $55 dollars. That uncertainty could explain why discounts stated in terms of promotions are more successful.

Good Promotional Campaigns

Talk with your clients about why good promotional campaigns must deliver value. Designing an effective campaign requires careful planning and calculating ROI and paying attention to the long-​term revenue boost. Your clients will want to start by targeting the right audience. To learn more about specific audiences, check out the AudienceSCAN profiles available on AdMall from SalesFuel and share this information with clients.

Photo by Artem Beliaikin from Pexels

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.