Around 75% of consumers admit that they are likely to make another purchase after they gain a bonus from a company. In fact, only 8% of buyers say that bonuses do not influence their purchasing decisions at all. This makes them a very useful tool for a business. Yet they can also be a minefield, and getting them wrong can cause more harm than good.
Defining a Bonus
A bonus is an addition, often in the form of a free product or upgrade, that is added to a purchase. There are several reasons companies do this, and you may have experienced them yourselves. It can be as small as getting 20% extra in a cereal packet, to having upgraded interiors and specifications on a new car purchase.
Providing bonuses can be a much better tactic than offering discounts. This is because it gives the sense of added value. It can also be used to push a customer to buy more, particularly if they reach a certain threshold or purchase a specific amount. Therefore, bonuses deployed correctly can be extremely effective.
Bonuses in Practice
The iGaming sector, which is concerned with the online provision of casino and cash games, has used bonuses as a way to attract customers for some time. This has worked twofold. It has attracted new players to the genre as a whole, allowing them to try gaming without making a full financial commitment. Secondly, it is used as a way to lure players away from the competition, of which there is a lot.
When employing these, casino bonuses can take many different forms. Some websites break them down into easy-to-understand charts and rankings, showing choices such as matched deposits, free bets and free spins. This lets people have a degree of ownership over which bonus is right for them.
Why Use a Bonus?
The first reason is to promote something, which could be a product, or it can be done just to raise awareness of your brand. When combined with user feedback, such as asking opinions and getting people to share their experience on social media, you can quickly build a following and virality.
One obvious offshoot of this is that it can increase sales. New customers may not have been aware of your product or service, bringing them into the fold. It could even bring lapsed customers back. This must be offset, though, as all bonuses cost a company money. That free product is something that could have been sold, and thus cuts into margins. Costing must be done appropriately.
Lastly, it can give you an edge over your competitors. If they are releasing a new product to compete with one of yours, giving a free product can let people know how superior you are. This can seriously disrupt their launch, bringing in new customers and ensuring old ones don’t drift to the opposition.
Avoiding Bonus Backfires
There are instances in which a bonus can backfire. Everything needs to be of value, and customers will not be interested in an item or offer they wouldn’t want to purchase on its own. Yet if bonuses are also given out too frequently, it can negatively impact associations with that product. Once something is given for free, then the customer’s reference point for the value of that item can become zero, especially if you are giving away large products on a regular basis.
One trick to overcome this is to actually tell the customer how much the free item is worth. You may have seen this before. It could be a ‘buy now and get this item worth £39.99’ scenario. This is enhanced when a time frame is put on it, making these offers limited.
The Types of Bonus You May Provide
Providing value involves giving something as opposed to applying discounts. What you give will depend on your product. A fashion brand will have totally different offers than a software company. Yet the core principles remain the same.
Free samples and trial-sized items are good for those who can provide them. This lets people have a small sliver of the product, and it works for companies that have items like cosmetics, food and similar products. If this is not possible, then consider a free gift. For example, a purchase of high-end sunglasses may come with a branded beach towel. People are most likely buying these for summer sun, so give something that ties in.
Thus, your bonus can take many different forms and will vary. Ask your customers what they want, or what would actually be of value for them. This will ensure you are not launching promotions that fall flat, and you get the most from your promotions.