Why Asking Consumers to Buy More Can Strengthen Your Next Brand Promotion
A closer look at the digital promotions strategy
Our recently released 2022 Digital Promotions Reportdescribed five key variables for effective promotion design and how these variables change in importance depending on what stage of the promotion journey the consumer is in. Based on more than 100,000 promotion offers and three years of campaign data, the information in the report helps tell the story of what makes promotion effective.
Today, we’re digging deeper into one of the report’s most compelling recommendations to help advertisers understand the levers they can use to improve promotion performance and deliver value to shoppers when it matters most.
Read on as we explore the nuance behind a promotion’s required purchase quantity, and don’t forget to download the full report below.
Understand the required purchase quantity
Simply put, the required purchase quantity is the number of individual products a consumer must purchase to qualify for a promotion. Think of this as a “Save $1.00 on Two” offer where the required purchase quantity is two.
Our data suggests that consumers understand the relationship between offer value (the dollar amount saved by taking advantage of the promotion), the purchase quantity required, and the price of the promoted product. When designing a promotion, brands need to understand how often their products are typically purchased and used by consumers in order to determine a purchase quantity that makes sense.
When done right, a higher purchase quantity can increase the impact of the promotion by up to 100%. Our analysis shows that consumers will assess the required purchase quantity of the promotion based on the product category and their typical shopping habits. For some categories, such as perishables, increasing the purchase quantity beyond normal purchase behavior actually decreases the promotion’s overall redemption rate. After all, the amount of cheese a family can eat in a week is limited.
In contrast, brands can increase the purchase quantity required for non-perishable items — such as canned cat food and other shelf-stable products — while enjoying attractive buy-back rates as long as the effective discount ( the percentage of savings compared to the total price of the product) remains convincing.
Increasing the required purchase quantity from one to two represents the biggest hurdle for consumers. However, if they deem the category and effective discount to be sufficient, consumers will easily activate and use promotions that require them to purchase multiple products. In fact, consumers who activate promotions with required purchase quantities greater than two take advantage of these offers at higher rates. This means that in appropriate categories, advertisers can leverage higher required purchase quantities as well as attractive effective discounts to move a higher volume of redemption units.