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Tech Guest Viewpoint: Margin-Friendly Promos That Convert


By Melanie Curtin, OpiaTalk

Promotions, discounts, and coupons, oh my! It’s easy to have a love/hate relationship with them. On the one hand, they’re proven to bring in business and boost conversions. On the other, they can cut into margins.

It’s often assumed that the bigger the promotion, the better it will convert. But what if it’s not about the promotion itself? What if it’s more about the delivery?

Data is clearly starting to show that for modern consumers (particularly Millennials), success with promotions is linked more to creativity than to a deep discount.

Example 1: Creative one-off “events”

Last summer, men’s shorts brand Chubbies ran a practice run for Cyber Monday, in July. They released 12 surprise gifts, one for each hour (a “gift” was really just a digital promo).

In addition to the “cool factor” of surprise gifts (what’s it gonna be?), this encouraged social sharing. If I know a “gift” is only available for the next hour, I’m more likely to share it on social media. Remember that Chubbies wasn’t necessarily offering new promotions, just packaging them up in a fun, compelling way. The results:

• The campaign resulted in conversions at 4.6 times Chubbies’ normal rate.

• Overall, Chubbies put the ROI for the entire thing at 35.5x (based on total sales).

Example 2: Interactive on-site engagement

A sports equipment retailer used the OpiaTalk platform to release a relatively modest digital promo: $5 off an order of $99+ (platform is an interactive widget with a countdown – use it or lose it with a social element).

This is not a very deep discount. As a consumer, the most you could get off is 5%, and the more product you order, the lower the discount percentage will be – an order of $150 would mean just 3.3% off. One would think, then, that this promo wouldn’t do particularly well, or that at the very least it would lead to a decreased AOV. In fact, results were the opposite:

• AOV of sales in the widget were 99% higher than average.

• For a similar retailer, this method of distribution outperformed an identical static offer by 50%.

Again, the data shows that efficacy is tied more to the experience of the promo delivery than its amount. It didn’t matter to consumers that they were “only” saving 5% or less – it was a fun and engaging way of taking advantage of a promotion, so it worked. In the traditional view, promos are loss leaders. But it’s a fallacy to think you have to give away the store to get a response – discounts don’t have to be deep to work.

Bottom line: Retailers wanting to use promos to supercharge conversions should weight the HOW over the WHAT. How are you delivering your promos? Is your distribution method fun, interactive, or engaging? Does it have an element of surprise, delight, and immediacy? Get creative and you can ‘get away’ with surprisingly low-margin offers, leading to even higher-return conversions.

Melanie Curtin is Senior Director of Marketing & Communications at OpiaTalk.

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