What Consumers Want

New research into the Promotions & Incentives industry uncovers the latest trends.

One of the ways RedBalloon has always enjoyed delivering good times to Australians and Kiwis is by supporting other businesses and brands to develop the relationships they have with their clients and customers.

Over the years we’ve done this in a number of different ways through prize draws, gift with purchase, competitions, special offers, instant win promotions and other clever engagement strategies. Over the last 12 months we’ve been in more conversations about promotional marketing than ever before as businesses seek to inspire ever more demanding consumers.

So we decided to do some research to find out what consumers really want. What will drive them to respond to your message, answer your questions, trial your product or service and even stay loyal?

With the views of more than 1,400 people our Promotions & Incentives Survey (Download full report) should give you some food for thought when developing your next promotion to ensure that you get the most bang for your buck.

First off, the survey revealed we are a nation of bargain hunters; 85 percent of consumers admit they are ‘suckers’ for special offers and are much more conscious about finding special offers and discounts now than they were 12 months ago. Great news for marketers looking to crack the ‘try me’ conundrum.

It came as no surprise that price discounts were rated as the most effective promotion or incentive to sway one’s purchasing decision. However, for many brands price slashing is not an option and this leaves marketers with the challenge of finding the right incentives to convert price sensitive consumers. Discounting is not a long term strategy for developing brand value (unless that’s what your after) and could trigger a downward price war in your category that serves no ones interests.

So let’s discount discounts, as business strategy and look at the activities that add value to brand position.

What really works

The top three incentives rated by consumers as “highly effective” in their purchasing decisions are:

• Receiving a free gift with purchase
• Competitions and the chance to win prizes
• Bulk order offers (e.g. two for one)

Even when brands are being generous and giving gifts away the consumer is still a discerning creature with 70 percent preferring an incentive voucher that gives them the choice of a wide selection of options as opposed to a specific reward.

The least effective were gifts that relate directly to the product (e.g. golf balls with a golf club or a cook book along with a blender) (9 percent), or practical gifts (21 percent).

Experience based incentives are an increasingly popular way to add an experiential dimension that material brands cannot provide to their customers. RedBalloon.com.au uses a unique range of more than 2,500 experiences in Australia and New Zealand to provide experience based prizes and promotions to brands across a vast range of industries.

James Wright, Account Director at RedBalloon says, “Marketers use RedBalloon for incentives because we can extend their brand association with a positive experience by giving people the chance to experience their dreams. Sending someone sky diving or horse riding on the beach gives the consumer something to remember and they attach those memories to the product they have purchased.”

Other key findings from the survey outline effective ways to drive consumer buying behaviour and creating greater engagement with consumer brands.

• What instigates brand trial?: 48 percent of consumers are influenced to trial a new brand or product if they receive free gift, 29 percent because of an instant win offer, 28 percent because of bonus Fly Buys or other points and Cash Rebates. One in four would trial a new brand if it donated a proportion of the stakes to charity.
• What entices consumers to enter competitions? The top four prizes that drive competition entry are: Holidays and Travel, Retail Gift Vouchers, Experiences to share with friends or family and an Experiential gift of the consumer’s choice (e.g. flying, driving, pampers or getaways).
  To prove the point – over half the respondents completed our survey because of the chance to win a $250 RedBalloon Gift Voucher!
• Do consumers think they have a chance of winning when they enter competitions? 51 percent are pessimistic, 49 percent are optimistic. Instant gratification versus delayed: When consumers enter a prize draw competition 74 percent prefer to know instantly whether they have won a prize, 26 percent do not mind being notified at a later date.
• Structuring prize pools: When it comes to competitions, size does not matter as much as chance. Close to half would prefer to see a large number of smaller prizes as opposed to a single large prize or a small number of large prizes.

Cut through is created when a brand surprises and delights a customer. In today’s world of social media hype, word of mouth has escalated to an entirely new level.

When experience based incentives are used to promote a brand to consumers, it gives the customer ‘something worth saying’ and customers will keep on re-telling the story of going on their experience in association with your brand.

RedBalloon works with more than 1800 clients implanting strategic incentive programs aimed at changing behaviour. So if you are currently throwing around ideas for your next campaign, why not embrace experiences and get in touch with our corporate team for some fresh thinking.

Author: Matt Geraghty, RedBalloon

Date: 20/08/2010

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