What kind of promotions hook you? Do you know what kind of promotions hook your customers? Have an idea of which promotions lead to greater return on marketing investments (ROMI)? We do!
Between February and March of 2018, Aberdeen surveyed 212 businesses about their promotions strategies. Respondents were asked to share the details of their promotions strategies, why they utilize specific types of promotions, and the business value derived from each strategy.
In this survey, Aberdeen found two major types of marketing promotions: reward-based and discount-based promotions.
Aberdeen defines reward-based promotions as those that offer an incentive in the form of digital or physical gift cards, prepaid cards, merchandise, or checks to encourage action or purchase. Reward-based promotions needn’t necessarily be validated prior to reward issuance. Discount-based promotions reduce the purchase price, and the customer can use the discount at the point of purchase.
In Next-Generation Promotions: Foster Customer Engagement & Maximize Marketing Effectiveness, Aberdeen found fostering customer engagement to be the top factor influencing whether marketers veer reward- or discount-based in their promotions strategies (Figure 1). The reason why marketers select one strategy over the other is to drive purchase intent, attracting conscious customer spend in favor of purchasing the product/service.
Figure 1: Top Criteria Firms Use When Selecting Between Reward-based Promotions vs. Discounts & Coupons
Check out our exclusive research on reward-based vs. discount-based promotions here to reveal the strategy Aberdeen found to yield greater ROMI, deliver far superior performance results, and to find out which strategy respondents say leads to an average 27.2% year-over-year increase and 20% greater annual improvement in customer satisfaction rates (as compared to companies using the other type of promotions).
[Editor’s note: Please note that use of each promotion type is not exclusive, and marketers often use a mix of strategies to promote services and products.]