Supermarket Special Offers - Are You Part of a ￡100 Billion Crime?

If you run promotions as part of your trade marketing activity, then chances are, you are guilty as charged.

An Introduction to The Psychology of Promotions

Understanding the psychology of promotions boosts sales and frees you from a never-ending cycle of needlessly giving away margin.

Over recent years, I have uncovered more than 480 specific psychological insights that can have a dramatic impact on a promotion's likely performance.

I firmly believe that if brands and retailers understood the psychology of the offers and deals they run, they could add literally millions to their bottom lines. Forget lowering the temperature in-store by 1%, instead, focus on making promotional activity more effective and yet less costly at the same time. Serious low handing fruit!

What psychological factors of promotions influence shoppers?

The visual appearance of a promotional message is often more influential than the deal itself. That is to say that how your promotional display looks can be more important than your actual promotion.

Take these 5 Insights as thought starters:

1. Syllables

Each syllable of a price in a supermarket reduces its chance of being remembered by 20% (￡2.80 more memorable than ￡2.77) - better still, smoother, round prices stick with us, so go for a nice, solid ￡3!

2. Size matters

When looking at 'Save ￡5' or 'Save 10%', shoppers will find the one with the biggest number disproportionately appealing. With that in mind, go for communicating in the way that promotes savings using the biggest number, not necessarily the biggest financial saving.

3. Loss aversion

As a species, we prefer to avoid losses. Save 20% is better than an extra cup of coffee. But, and it's an important but, our own fMRI research identified that 'Free' is processed by the rewards centre in the brain and so bypasses reason altogether.

In summary, communicating the losses shoppers are avoiding is more effective than telling them how much they are gaining. Unless, you incorporate the word 'Free', then a different set of behavioural science rules are at play.

4. Power of limits

Special offers with restrictions ‘limit two per customer’ or ‘offer valid only until a certain date’ lead to higher sales than the same deals without restrictions due to the fear of missing out (FOMO). Create a sense of urgency in your campaigns to boost purchases. And please. don't conceal the promotion end date!

5. Charm pricing

23% more shoppers bought a product whose price ended in 9 (￡1.39) compared to when it was ￡1.34. There was no difference when the product was priced at ￡1.34 or ￡1.44.

Summary

When we talk to shoppers, they almost always say that they evaluate and calculate in-store promotions intelligently and would never fall for anything that wasn't an exceptional added value offer...

...but in actual fact, most of us very often do!

Adcock Solutions?have been improving the marketing communications of leading brands and retailers for more than 25 years.

We explain how your customers really think and make decisions, so that you can engage with them more effectively. Come to us for Behavioural Science insights and expertise that improves the visibility, appeal, engagement, and sales of your brand.