BOGO Promotions Explained: Why Buy One Get One Deals Work And How To Use Them?
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 incentivise shoppers and boost revenue of your e-commerce business, BOGO is a perfect solution for you!
What does BOGO 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 price) 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 effective?
According to a study carried out by AMG Strategic Advisors, 66.1% of questioned consumers admit that they like the BOGOF deal ("buy one, get one free") the most out of all BOGO promotional offers.
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 BOGOF promotions are effective – the thought of getting something for free incentivizes customers to shop. The free 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.
Examples of BOGO promotions
1. Burger King – free product with an eligible purchase
Burger King offers a free Whopper (regular or plant-based) with the first purchase via Click & Collect method (order online, collect at the chosen restaurant) of minimum £3. The promotion applies when the Whopper is added to cart along with other items so the total for the order is above £3.
2. Publix – automated BOGO deals
Publix offers their customers a different BOGO item twice a week. During the holiday week, the product offered within the promotion is shelled black eyed peas. Along with the typical BOGO sale, Publix also offers promotions such as 'buy two for [a certain amount]' to their customers.
3. Famous Footwear – Buy one, get one 50% off
Famous Footwear frequently runs BOGO promotions at their stores. When customers buy two pairs of shoes, the other one – of equal or lesser value – is 50% off.
4. Subway – free sandwich with a specific order
For World Sandwich Day in 2018, Subway offered a good deal on their sandwiches – buy one 6-inch sandwich + 22oz drink combo, get one 6-inch sandwich for free.
5. Linen Chest – Buy one, get one 50% off (including on-sale items)
Linen Chest offered their customers a BOGO sale during which they were able to get a second product 50% off and that included items which were already on sale. The deal was introduced automatically when customers proceeded to checkout with two items. No BOGO coupons necessary here.
6. Coca-Cola Embonor – versatile BOGO deals
Coca-Cola Embonor created a variation of BOGO sale, particularly a bundle discount: buy 6 cans of 220ml each and pay for 5.
Especially for the holidays, Coca-Cola Embonor introduced yet another BOGO offer – when buying any beverage in a returnable container, you can get a package of 6 Christmas ornaments for half price.
The discount appears after the beverage (at least one) and the Christmas decoration package are added to cart. Instead of $5,000, the ornaments then go for $2,500.
Coca-Cola Embonor introduces many more promotional offers which reward their loyal customers and incentivize new ones.
Why are BOGO promotions worth it for your business?
- Easy inventory management – BOGO offers are a quick way to clear out excess inventory, sell out seasonal merchandise or products with the sell by date. Moreover, such promotions can be the factor responsible for boosting up-selling and cross-selling in your e-commerce store.
- Ease of use – The promotion can work both on the cart level (meaning that the second unit is automatically marked, for example, free or half price when added to cart) as well as in the form of BOGO coupons (only when customers type in the promo code at the checkout, the promotion is valid).
- Brand value is not cheapened – With BOGO, the perceived value of a product is not affected. Offering, for example, an initial 50% discount on a product might create an impression that its value is lower than it originally was. BOGO, however, guarantees up-keeping the original value of the main product as it is sold at full price (and then the other discounted or free product is added to it, for instance, in order to clear the excess inventory).
- Optimized logistics – As the BOGO promotion naturally drives bigger orders (product bundles), it facilitates the packing process for each order and optimises shipping costs.
What are the best practices for BOGO discounts?
- Set clear conditions – communicate the details of the BOGO offer, such as which items are eligible for the discount and any exclusions and time or stock limits. You should protect your product's margin by adding minimum order value or validation rules concerning the cart content.
- Consider the impact on your bottom line – BOGO promotions can be a great way to drive sales, but it's important to consider the impact on your profitability. Make sure the offer is financially viable for your business.
- Make it make sense – BOGO deals work best when they are revolving around complimentary products. For instance, a guitar store may offer a set of guitar picks for free with a purchase of a specific guitar set – imagine if they offered free drumsticks instead. It wouldn’t make much sense, would it?
- Make the offer time-limited – creating a sense of urgency can help drive sales. Consider setting a deadline for the promotion or limiting the number of discounted items available. Even better if you can combine the BOGO deal with an upcoming season or holiday.
- Test different BOGO types – consider testing different types of BOGO offers, such as "buy one, get one 50% off" or "buy two, get one free," to see which types of offers are most effective.
- Promote the offer prominently – even the best promotion strategy will fall flat if it’s not promoted enough. Use multiple channels to promote the offer, such as social media, email marketing, and in-store signage. For ecommerce, the best way would be to notify users about the offer at every step of their shopping journey – on the product page, cart page and checkout view.
Learn more: Go here to learn more about the best practices of promotions UX.
How to create a BOGO promotion with Voucherify?
Voucherify is an API-first promotion management tool that allows marketers and developers to tailor marketing campaigns to their exact business needs. BOGO promotions can take multiple forms and can play out in a variety of ways. With Voucherify, BOGO offers can take the form of automatic discounts or generic and bulk promo codes. It is possible to achieve multiple results by playing around with the discount type, effect and value:
- Buy one, get one free.
- Buy one, get one 50% off.
- Buy two, get the third one for free.
- And many more.
All promotion use cases can be then further adjusted to protect the campaign and your bottom line:
- Flexible and granular time limits that allow you to run flash-type BOGO offers.
- Limits on the number of campaign uses per customer within a specific time frame.
- Limits on the total order value, size and content.
- Custom business restrictions supported by metadata.
Learn more: How to create a BOGO deal with Voucherify?
Build your next BOGO promotion with Voucherify