According to Convince&Convert, about 93% of customers use at least one coupon or a discount code throughout the year. Accordingly, discount promotions are what motivates almost every consumer to make up their mind and finally purchase something.
If you are looking for a particular marketing strategy to incentivize shoppers and boost revenue of your e-commerce business, BOGO is a perfect solution for you!
What does BOGO promotion mean?
BOGO simply means “buy one, get one.” It is a sales promotion during which shoppers are offered a free or a discounted product (for instance, they only pay half the sum) when another product of the same or higher value is purchased. BOGO can certainly serve as an example of a bundle discount.
Why is BOGO promotions effective?
Buy-One-Get-One (BOGO) promotions are incredibly popular with consumers, and it’s not hard to understand why. A study published in the Journal of Business Research found that shoppers often prefer BOGO deals over equivalent price discounts. These offers tend to grab more attention and are chosen more frequently, particularly when the savings are substantial.
The appeal of BOGO deals goes beyond the numbers – they tap into a strong psychological draw. Getting an additional item for free creates a sense of added value and satisfaction, making the deal feel more rewarding.
The psychology of “free” and the Zero Price Effect
As in the words of Dan Ariely, the author of Predictably Irrational, “zero/free is a source of irrational excitement; it’s called the ‘zero price effect.'”
In one of Ariely’s studies, consumers were offered two options: to buy a Hershey Kiss chocolate – a common, inexpensive treat – for 1 cent or to buy a Lindt Truffle – a more refined and more expensive type of chocolate – for 15 cents. Given the quality of the products and the offer’s value, nearly 3 out of every 4 participants chose to buy the Lindt Truffle.
In the next part of the experiment, the price of both items was reduced by 1 cent – the Lindt Truffle’s price was 14 cents and the Hershey Kiss was free. Within this model, 90% of participants opted for the free Hershey option, even though the price difference between the products was the same.
The experiment proves that people do not simply set costs and benefits against each other but rather focus on acquiring a free product. This is exactly why a BOGOF deal is effective – the thought of getting something for free incentivizes customers to shop. The complimentary item is often overvalued in their eyes, even when it is juxtaposed with a higher-quality product at a discounted price.
Additionally, BOGO promotions are usually introduced only for a limited period of time which creates a sense of urgency among customers convincing them to shop.
Beginner’s Guide to Promotions Psychology
Learn the top-secret methods for boosting promotional campaigns.
Thumb through plenty of tested marketing and sales psychology tricks.
See examples of how global brands use marketing psychology in their campaigns.
