Promotions are used to directly, quickly, and profitably change behavior. Most commonly, that behavior change falls into one of these categories: driving more visits, encouraging people to purchase at a time they normally would not, or inspiring more profitable bulk purchases.
The most common types of promotions are challenges, bonuses, and occasion based rewards.
Challenges. These promotions challenge reward members to perform actions to earn a prize. For example, a challenge could be “buy gas five times this month and get a free large coffee” or “spend $50 on snack items this week and get a free liter of soda.” These challenges are intended to increase visits and spend during a specified period of time.
Bonuses. These promotions often offer an instant benefit for the rewards member. “Purchase a sandwich and a large soda and get a bag of chips for free” is one example. Bonuses are primarily designed to increase spending during a visit, but secondly, they may also increase the number of visits since customers could seek to take advantage of a bonus multiple times.
Occasion-based rewards. These promotions are dependent on a time of year, such as the holiday season, or a well-known event. An example of an occasion-based reward could be “purchase two bags of chips and get a liter of soda for free during the week leading up to the Big Game.”
While there are multiple options for promotions, the most effective ones will combine these three key traits:
- Compelling. The prize or bonus that members can earn must be something they truly desire. Getting people to change their behavior is very challenging
and it only happens if they see a clear and strong benefit in doing so. “Fill up your tank 12 times this month and get 50 cents off a six-pack of soda” may make sense to your bottom line, but it likely won’t be compelling enough to get people to increase their visits.
- Attainable. People must believe that it’s feasible to earn the prize of bonus. For example, “get three cups of coffee every day this month and earn a free tank of gas” certainly has a compelling prize, but visiting three times per day is likely impossible for most customers, so they won’t even try.
- Finite. Since urgency is a strong motivator, it’s important to set a reasonable end date for your promotion. Week- or month-long ones are most common because they are the easiest for customers to keep top of mind. Longer promotions run the risk of losing excitement and could even see customers forget about them all together. You also want to make your promotions finite so that you can analyze the results and compare them against those done previously.
The benefits and complexities of promotions come in nearly equal measure. While a well-designed promotion can’t be surpassed for driving visits and incremental purchases, they are also incredibly difficult to successfully implement on your own. Learn more about utilizing promotions by downloading “Essential Building Blocks of Convenience Store Reward Programs.”