Every business relies on effective promotional strategies to attract new customers, boost their sales, and build a base of loyal customers. However, among these strategies, one that has gained significant traction is the Purchase with Purchase (PWP) promotion.
The marketing strategy may appear simple at first glance, but there are many intricacies that consumers and businesses need to grasp. This article explores the concept of PWP promotions, the advantages for everyone involved, and important factors for making it work.
Understanding Purchase with Purchase (PWP)
PWP stands for Purchase with Purchase. This is a sales promotion strategy in which customers are offered an additional product at a discounted price only when they buy the main product. Unlike the Gift with Purchase (GWP) promotion where customers are offered the additional item for free, PWP involves offering customers the additional item at a discounted price.
For example, an electronics brand can offer PS3 games at a discounted price if a customer buys a PlayStation 3. This promotion is designed to motivate customers to spend more while making them feel like they’re getting a great bargain.
Benefits of Purchase with Purchase
Purchase-with-purchase (PWP) promotions provide several benefits for businesses and consumers. Here are some of its major advantages for businesses:
1. Clear Out Dead Stock
PWP promotions work well for clearing out products you no longer expect to sell. You can clear out dead stocks by placing them into a bundle with high-demand or popular products. Doing this helps you cut out unnecessary storage costs and increase your sales.
2. High Conversion Rate
Conversion rate is an important metric that measures the percentage of customers who complete a desired purchase out of the total number of potential customers. An effective PWP promotion typically leads to a higher conversion rate and revenue and encourages customers to spend more.
3. High Average Order Value
Running a well-planned PWP promotion can help you increase your average offer value. For example, if a customer buys a phone, you can offer a discounted earphone as part of your PWP promotion. By making this offer, you’re encouraging customers to buy more than just the phone, which increases your total order value and contributes to a higher AOV.
4. Low Costs
PWP promotions provide a budget-friendly market marketing solution for low-cost products. Instead of spending heavily on separate marketing campaigns, you can utilize the appeal of a bundled deal to entice customers and establish a sense of value.
5. Customer Loyalty
Another key benefit of using PWP promotions is that it helps build customer loyalty. Rewarding your customers with PWP offers creates a sense of belonging and appreciation among them, which can lead to positive word of mouth and long-term customer relationships.
Factors to Consider When Implementing PWP Promotions
● Target Audience
When planning your PWP promotions, ensure to keep your target audience in mind. This is because different people have varying preferences and reasons for purchasing things. Remember, what works for one may not work for another.
For instance, a discount promo may be successful if your target audience is price-conscious and seeks value. However, offering limited edition items or exclusive access may work better if they’re after quality and exclusivity.
● Strategic Budgeting for Marketing
PWP promotions are a great way to boost sales and customer loyalty. But they can be expensive. If your brand can’t afford to run a purchase with a purchase promotion, it’s important to discuss alternative options with your sourcing partner to find the best fit for their budget and needs.
● Quality of Promotional Item
Your choice of promotional item can greatly influence how customers perceive your brand and promotion. If the item is low quality, customers will likely view the brand negatively, possibly seeing it as cheap or unreliable. This negative perception could deter customers from engaging in future promotions.
On the other hand, a high-quality promotional item can make customers see your brand as thoughtful and dependable, potentially increasing their participation in future promotions and encouraging repeat purchases.
● Duration of the Promotion
Another important factor to consider is the duration of your PWP promotion. A shorter duration can create a sense of urgency and excitement, leading to higher participation. On the other hand, a longer duration can build anticipation and generate buzz, but longer ones may force customers to lose interest, leading to a drop in participation.
● Marketing and Promotion
It’s important to have effective marketing and advertising strategies to spread the word about your promotion. Through various channels like social media, online, and in-store advertising, brands can expand their reach and entice more customers to get involved.
Challenges and Considerations
Implementation Challenges
a. Inventory Concerns: Managing inventory for your PWP campaigns can be tough. You must ensure you’re adequately stocked with your primary and secondary products. You also need to deal with logistical issues like coordinating deliveries and managing returns.
b. Balancing Profit Margins: You need to consider the impact on profit margins when offering significant discounts on PWP products. A thorough calculation of costs and benefits is necessary to determine the financial viability of the campaign.
Customer Perception
a. Transparency and Clarity: It’s important to communicate the terms and conditions of your PWP offer. Any confusion can cause customer frustration and harm your brand’s reputation. Ensure that customers are well-informed about all promotional materials of the campaign.
b. Perceived Value: Customers will be encouraged to partake in your PWP campaign only if the offer is perceived as high value. If the discount or special price isn’t attractive, your customers might not want to join.
Examples of Successful PWP Campaigns
Case Studies
- Beauty and Cosmetics Industry: In this promotion, Lancôme offered customers the chance to take advantage of a discounted pink makeup bag with full-sized and luxury sample-sized products worth more than $65! They only need to spend $85 or more on Lancôme products.
- Electronics: TBM and Samsung worked together to provide their customers with an excellent limited-time PWP promo. Customers who purchase any Samsung TV will get a PWP instant Rebate RM100 soundbar at a discounted price.
Analysis
These campaigns were successful for a few reasons:
- Relevance: The PWP products were relevant and attractive to the target audience.
- Value: The discounted prices offered significant perceived value.
- Promotion: The offers were effectively promoted through various channels.
- Seamlessness: The offers were easy for customers to understand and redeem.
In Conclusion
Running a purchase-with-purchase promotion comes with risks and rewards, just like any other marketing strategy. However, with thorough research and careful planning, this approach can greatly benefit both your customers and your business.
If you’re considering implementing a PWP promotion and need premium promotional products to enhance your campaign, look no further than the UCT (Asia). We offer a diverse range of marketing materials that are sure to help make your promotion successful. Contact us today to learn more about how we can help you!
