On-pack promotions that offer rewards are more effective than competitions, a study has found.
Promotions firm Hive undertook analysis of the types of on-pack promotions available in three UK supermarket chains, and it found that competitions, a popular choice of mechanism when it comes to customer engagement, outnumber rewards by three to one.
However, it found that rewards-based promotions can have as high as a 23% response rate, compared to a 1% response rate for competition-based promotions.
“Brewer Charles Wells is a prime example of the value of a reward mechanism," said Jonathan Jackson, CEO of Hive. "It used a cash-back offer that paid £5 by cash transfer into a beneficiary’s bank account. By the end of the promotion, Charles Wells had a redemption rate of 23%, compared to an industry standard of around 1% for competition-led on-pack promotions.”
Hive also found that 87% of promotions in FMCG now require proof of purchase, and about half achieve this through unique codes printed on pack.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.