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Marketing 101

Promotional Offers 101: 5 Types of offers to add value to your seasonal promotion

The first three quarters of the year pale in comparison to the pressure that the fourth quarter brings, but it is especially true for businesses looking to hit milestones, take advantage of the spending season, and maximize their revenue before the end of the year. With the increasing commodification of the holidays, we can opt-out (or make a campaign of opting out, like REI) or instead make smart investments into promotions — which doesn’t always mean being focused on the total revenue gained. Brand experience, affinity, and your products’ mindfulness are all investments not to be taken lightly. 


Other than making sure you actually get the promotion launched, the most important part is nailing the perfect offer. 


There are endless options for how to structure a promotion, but we’ve segmented them into five main types, and provided a few examples of each: 

  • Future purchase
  • Free product/bundling
  • Cause-based
  • Discounting
  • Engagement-focused


How to choose the right type of promotional offer?

Based on your specific goals, the best offer may be something less cash/dollar focused and more brand oriented: discounting impacts margin pretty significantly. McKinsey, a global research consultancy, found that a 5% price reduction requires a nearly 19% increase in volume to make up for the discount. Understanding the profitability of the offer is central to keeping your lights on after the holidays — don’t bankrupt your business by trying to hit a number. 

In addition to discounting, there are four main types of offers that drive upsell, engagement, or future purchase. 

Looking for a simple way to brainstorm an upsell? If you have an active shop or active services, review your purchase data and identify if there are items that are commonly purchased together. 

About each offer type


Future purchase

Consider including a free-printable certificate to help the gift giver showcase the new. (Automate this with a couple quick Zap-connections.)


Presale

  • Next product launch
  • New color
  • Next year (deal with shipping delays)

Good for companies facing supply chain issues and shipping delays, limited inventory. Builds anticipation/excitement

Not good for companies not launching new products or colorways. Not good for necessary items, better for “fun” discretionary items.

Gift card 

  • Pay X for gift card value of Y
  • Spend X and get a gift card for Y for next time

Good for loyal customers, companies that offer gift cards (ideally digitally as well as physical ones), good if you’re facing inventory constraints, shipping delays, supply chain issues

Not good for companies that don’t currently have a gift card program, or companies that rely on up-front payment to order product/perform service


Free Product/Bundling/Added Value

Pair two favorites, release a new product, or add value to the shopping experience with something like free or expedited shipping.

Bundles

  • Service bundled with a product
  • Complementary products bundled
  • One for you, one for a friend
  • Bulk deal, by 3 X, get X free

Good for companies with multiple products/services, complementary products available 

Not good for companies with singular products/services, or items that should be singular/one-time purchases.

Free Gift with Purchase

Good for companies with access to complementary products, without inventory issues

Not good for companies with supply chain issues, packaging restraints

BOGO

Good for companies with multiple products, or items that people want multiples of. Good for inventory that isn’t limited, or products you want to deplete

Not good for companies facing supply chain issues, limited inventory

Free Shipping

  • Free (expedited) shipping

Good for companies that have relationships with shipping partners, or do their own delivery

Not good for very small businesses that personally handle the shipping of each product 


Cause-based

If there is an authentic brand connection with philanthropy, consider leaning into it as an incentive based on purchase. 

Give Money

  • Buy a specified product, we’ll make a donation to X
  • Every purchase gives an X% donation

Good for companies that value social/ecological responsibility. Potentially works well for delayed products. Appeals to loyal and new customers. Aids with company image.

Not good for companies that don’t have the cashflow to make donations, companies with polarized clients that might oppose certain charities.

Take Action (Plant trees, build backpacks, etc)

  • With every order
  • Or every X spent

Good for companies that value social/ecological responsibility. Potentially works well for delayed products. Appeals to loyal and new customers. Particularly good for companies Aids with company image.

Not good for companies that don’t have the cashflow to make donations, companies with polarized clients that might oppose certain charities.



Discounting

This is a popular tactic, but it can be a challenging one. Beware of the discounting trap -- and do the math to forecast how it can help, not hurt your margins.
  • % Discount across the board
  • $X off when you spend $X

Good for companies with high profit margins, companies with singular products or limited services. Good for appealing to new customers in the consideration phase.

Not as good for businesses selling products that are federally regulated. Not good for slim margins


Other/Engagement

It doesn’t always have to be about the immediate dollar.  Engagement, with your audience and with your community of businesses strong relationships that increase in value over time. 

Quiz for Customer

Good if you’re facing inventory constraints, shipping delays, supply chain issues. Good for lifestyle brands, companies with options that vary depending on needs.

Not good for companies without product options. Less applicable for very serious, security-oriented brands.

Rewards

Good for companies with loyal customers, products that require repeat orders, variety of products.

Not good for companies with one-time purchase of products/services.

Partnership Discount

  • Spend X with us and get x% off at our partner’s shop
  • Or identify complementary products

Good for companies with relationships with complementary brands, brands with aligned values.

Not good for companies with mostly competitors, products unrelated to other areas.

Social Media Giveaway

  • Product bundle for likes/follows
  • Giveaway for newsletter signups 

Good for companies with a social media following looking for growth, best for engaged audiences

Not good for companies without a social media presence, not good for companies that don’t find their target consumer  via social.


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