What do you feel is the better promotional tactic?
October 8, 2017 7:14 PM   Subscribe

I run a small business with 75% of my business coming from working live events. I have a single line of products with two price points; $8 and $10. My promotion is any 3 'items' for $20, with a $2bump per $10 item. EX: 2 $8 items & 1 $10 item would be $22.00....I am starting to prepare for the holiday season and looking to stream-line and make the process easier if possible.....My questions...As a customer approaching a vendor table, what would appeal to you more? 1. My current set-up; Any # for $ ? or 2. (some of my peers do) Buy 3, Get one FREE!

I have asked a bunch of peers this question and have read many legit arguments for and against both style of promotion. The main argument against #2 has been the word 'FREE' de-valuing the item whereas, doing what I was doing, sounds more like a promotion; involves less spontaneous head-math which could alter the frame of mind of the customer and put doubt in their mind.

Of my nine products, 5 are at the $8 price point and 4 are at the $10. My costs are virtually the same across the board with the price differential pretty much coming from the 'gourmet' contents. I am considering going $9 across the board. I don't anticapate much resistance from my current customers or future ones due to observing my peers pricing. I have done the leg work and am completely in the playing field with my peers.

With my current promo of 3 for $20, I look at $6.66 per bottle discounted from $8.00. I would like to stay right about there going forth with my profit margin.

With the upcoming holidays, I want to heavily push multiple item sales. I have gift boxes that will hold 4 items.

I could do 4 bottles for $27, which would be $6.75 per bottle...
* yes, I have read the whole argument of using round numbers... $25 for 4 would be $6.24 per which is lower than I want to be. $30.00 for 4 is $7.50 per which is not a tremendous discount.
The customer will know exactly what they are paying per bottle with little math skills needed. Worked for me so far, for the most part....

But then I over think and see how well, some of my peers who I am friends with do with the 'Buy # get one FREE sales tactic. Could I do better? Do people gravitate towards free more, or is it secretly devalue my product, that I am willing to give away a bottle with the purchase of a few?

One peer suggested , just re-working 'not using the word FREE'. ex... "Buy 3 & the 4th is on ME!".
If I go this route with the new $9 price point.... People are paying $27 for 3 items and getting the 4th one 'FREE/ON ME'.... Price per is $6.75 per, which is where I am comfortable being on a multiple item sale.....Except, I wouldn't be promoting how much savings they are getting on a per bottle break, because I am pusing the 4th on as being not costing anything...

So, it comes down....I have heard the arguments from peers, which are all totally valid...But I want to also hear from people who are not in my business and what they feel would appeal to them when shopping?

Would you gravitate towards a straight forward # for $ (know what I am paying/saving) type sales tactic, or does the idea of getting an additional item for FREE/ON ME, make you more likely to take advantage of a deal?

If there is an y details I can add to clarify, please let me know...Very curious to hear everyones thoughts....
posted by TwilightKid to Shopping (28 answers total) 1 user marked this as a favorite
 
All that stuff is too complicated. Just charge $10 each and call it a day.
posted by spacewrench at 7:25 PM on October 8 [7 favorites]


As a mathematically-challenged consumer who would probably make a split-second decision based on emotions (which I think is the demographic you'd like to hear from?) I would probably be confused and put-off by the $2 bump for $10 items ("What? You said it was ANY three for $20 and now you're changing it because one of the items was $10? Never mind.") I would personally be more drawn to "Buy three, get one FREE!" It's simple, it's straightforward, and I'm familiar with it. For me personally, I don't read BOGO deals as devaluing. I would be more likely to feel like, "Ooo! Better get it while there's a deal."

Disclaimer: I have no idea what you're selling or what your market is like, which might change my answers. I assumed from the words "bottle" and "gourmet" that it was something along the lines of olive oil.
posted by quiet_musings at 7:26 PM on October 8 [9 favorites]


I'd prefer the 3 combo - lower total price point to get a deal, and I don't think I've ever wanted or needed four items from the same small business at an event.

But it's hard to judge, because all we know is at least some items come in bottles. So any general category or genre information on your shop or goods may get you better answers.
posted by SaltySalticid at 7:29 PM on October 8 [3 favorites]


I am ignoring your math for both of our sakes and just going with psychology. I'd rather get N items for $X, because what if I want N-1? Then if it's a "get one free" situation I kinda feel pressured to get another one I don't want, because, you know, it's free!! If I know it's $10 each or three for $25, or whatever, I can decide whether I want to get the two I actually want and pay full price, or get a third one and save a little on each. I feel, in short, less bullied by that promotion.
posted by fuzzy night at 7:30 PM on October 8 [9 favorites]


I won't troll this post, but if it will help clarify a bit. This is a hot sauce company. I have 9 styles and very often have people interested or want to buy at least half if not more.
posted by TwilightKid at 7:31 PM on October 8


buy three of the $8 bottles for $20
buy three of the $10 bottles for $25

But your $9 flat rate might be the best solution. If people often want to buy "at least half" then you could promote 4 bottles for $30-something.
posted by Iris Gambol at 7:44 PM on October 8 [4 favorites]


In that case, I would sell all the sauces for $9 each, with a “sampler pack” at a discounted rate. 4/$30 or 6/$45 would be a good deal, nice round numbers. I think “sampler pack” encourages people to think “I’d like to try several” and if your packaging is cute/reusable, I’d definitely get that over a couple loose bottles
posted by donnagirl at 7:44 PM on October 8 [38 favorites]


I know that I am more likely to buy 2 things instead of 1 because the 3rd is free. Thought process is kinda like this:

"Ooh this looks good, maybe I'll try one. Habanero or Jalapeno? Tough choice. Oh a 3rd is free? What the hell, I'll get em both and try this cotton candy flavor one too."
posted by pazazygeek at 7:44 PM on October 8 [8 favorites]


I don't see BOGO as devaluing the product at all.

Keep it simple - it snaps me out of a shopping trance if there's too much choice or complexity.

Promotions like this usually bumps me from "I want one in the kitchen" into "what a great deal I'll give them out as gifts".

If you keep the $8 / $10 tiered pricing, and do a flat "Mix & Match 3 for $22", that may activate people towards buying - as they figure they will get an extra good deal by picking 3 of the $10 bottles.

I assume you already have an "all 9 flavors set".
posted by metaseeker at 7:45 PM on October 8 [4 favorites]


Do they complain about the prices? Do you have an idea of your 5 most popular? Do a deal for something like that, an assortment kit. If you're really stuck on "Any N for $X," I'd suggest "20% off 3 or more," but that feels like a pretty generous discount. That's why I ask whether people complain about the prices. Maybe 20% if they buy all 9.

Can you run the numbers to see if you'd have the same income if you priced everything at $9? Heck, why not $10 for everything, is there flavor duplication at all? You don't have to price everything on cost of ingredients, having a simple product line is easier to understand. And why avoid the word "free?" It's a helpful word that people like to see.

/soapbox
posted by rhizome at 7:45 PM on October 8 [1 favorite]


BOGO is a lot more appealing than the price bump thing, which is confusing and annoying to me. I love BOGO and don't think it devalues a product at all, instead I feel happy and positive about the brand. I like free stuff and I like companies that give me free stuff.

But B3G1? That's not appealing either, I would feel pressure to get more product than I wanted to fulfil the B3 in order to get my free product and would skip it altogether; I don't even care for B2G1 promos and usually avoid them. It feels like a "waste" and is kind of overwhelming.

If you want to sell 4 products at a time I think a price list that shows discounts for volume (2 items for $2 dollars, 3 items for $2.75, 4 items for $3.50 etc) is your best bet.
posted by windykites at 7:50 PM on October 8 [2 favorites]


The thing you’re currently doing confuses the heck out of me. If there’s a “bump,” it’s not really three items for $20. I don’t see the get one free as devaluing the item at all. That would be my preference just because it’s simpler. If I’m standing at your table at an event, I don’t want to have to figure out something complicated.
posted by FencingGal at 7:51 PM on October 8 [5 favorites]


buy three of the $8 bottles for $20
buy three of the $10 bottles for $25


This is my favorite! You could even adjust up a little- 3 $8 for $21-22, 3 $10 for $26-27.
posted by ThePinkSuperhero at 7:54 PM on October 8 [2 favorites]


Buy 3, get one free is easy and familiar (I see it all the time at the grocery store). It also goes with your packaging and encourages people to buy four, not just three.
posted by metahawk at 8:06 PM on October 8 [1 favorite]


Free is great for this product, as hot sauce people like to have a library of sauces. I can see myself considering buying 2 but going for 3 to get a 4th free, and feeling like I got a great deal. Straightforward discounts like others have suggested also work.

Just don’t say 3 for $20 when $20 is the minimum, not the maximum. It feels fine-print bait n switchy.
posted by kapers at 8:42 PM on October 8 [3 favorites]


Two bottles for X or four bottles for Y might be another good tactic. People can do the math in their own brains if they want. I concur that hot sauce folk love variety and anything that gives them more options is going to be their preferred approach, particularly if they're new to your sauces.
posted by turbid dahlia at 8:49 PM on October 8


**another detail for clarity**

my price sheet does say Any 3 for $20 (Please add $2.00 per item 1, item 2, item 3, and.or item 4).... not in tiny print either....don't feel it is a bait and switch....

anothe rreason to go straight $9 across the board....

thanks everyone...i'm feeing a decision!
posted by TwilightKid at 8:51 PM on October 8 [1 favorite]


Yeah it's not bait and switch but it's also not "Any 3 for $20". $9 across the board is a great idea!
posted by turbid dahlia at 8:57 PM on October 8 [6 favorites]


A stand at my local farmer's market has absolutely delicious jam for $9 a jar and 3 for $25. I always, always buy three because I feel like I'm getting a good deal.
posted by mochapickle at 8:57 PM on October 8 [4 favorites]


Hey! I work quite a bit with pricing and pricing analytics and phrasing on promotions.

I think you are over-thinking the "devaluation" by using the word "free". In my experience, people are quite motivated by "free" and it is one of the most attractive words on most sale signs. It draws the eye.

Because I do my work based on data, I'd give a few tips here. Take the next few events to experiment. Sell for $10 each. Sell for $9 each. Sell with both $9 and $10 options. Record the average number of bottles per person at the different price points. At the same time, add in the multi-buys. One weekend, try Buy two, get one free, at $11. Another weekend, try buy 3, get the 4th FREE. Maybe another weekend, try selling "One for $9, or a flight of three for $25" (The word flight is pretty trendy in this kind of situation). A carrying box/4 pack box is a huge purchase incentive, so I would definitely try something around that. Maybe buy 3 get 4th FREE, maybe buy 4 get $10 off, however you want to structure it. BUT, and this is a big BUT - "Get one free" promotions are expensive for you in cost of goods. You have to pay the cost of the bottle when you give one free, and if you don't offset that with a lot of people increasing how many they buy, it's not worth it. Buy 3 Get the 4th free is probably the only way it will be advantageous to you.

Customers don't think in terms of per bottle. They think of terms of how much they spent. They don't care how much they saved.

No matter what, what other people suggest and what other products sell for, it's going to be different for you and your business. After every event, record how many customers you had that browsed, how many that bought, and how many the purchasers bought. Vary your prices. Go as low as you can go and still break even. Go high - super high, $20 a bottle high. It works for the cheese lady. Experiment.

My intuition is that this would be a good starting place:
1. One price point for all products.
2. 1/$9. 4 (Flight)/$30.
3. Emphasize homemade and natural ingredients.
4. Having a small sample with chips would help a lot.
posted by bbqturtle at 9:31 PM on October 8 [27 favorites]


I think you're making this too complicated. Keep your per-item prices as they are (or don't—I see you've marked a best answer) and advertise a $4 discount for any group of 3.
posted by adamrice at 10:08 PM on October 8


As someone who would only ever buy hot sauce as a gift, I would appreciate tiered pricing and "sets". I don't know wtf I'm looking at so I'll figure that my dear mother would like a $10 sauce better than an $8 one. I also don't want to agonize over which 3 or 4 she might like. Put 4 in a box, price the box at $30 and put "substitutions allowed" for people who do know what they're doing. Even if they choose 4 $10 bottles you're still getting $7.5 per.
posted by AFABulous at 10:44 PM on October 8 [4 favorites]


I like what bbqturtle wrote. Try different price points and deals and see how you can maximize your return.

As one more data point, I would consider buying more than 1 or 2 if there was a simple discount of say, "Buy three or more and get $1 off per bottle. Buy all 9 and pay only $70 (or whatever price you can reasonably afford to discount a bulk purchase)"
posted by AugustWest at 10:45 PM on October 8 [3 favorites]


For all 9 have some wood or whatever boxes made and charge $100. Limited edition!
posted by rhizome at 11:55 PM on October 8 [4 favorites]


Customers don't think in terms of per bottle. They think of terms of how much they spent. They don't care how much they saved.

This.

Also echoing what someone up-thread said about buying for personal use vs. gift-giving, especially this time of year. I am not a hot sauce fan or consumer. BUT a "sampler pack" of trendy artisanal hot sauces is a great gift idea! Or large bottles for individual gifts for work people! I kill many birds with one stone if a stop at your table relieves me of 3-5 gift-giving dilemmas for hard-to-buy-for folks. This makes me very happy and if I can get it done for around $25, all the better.

In addition to the excellent response from bbqturtle, I might add, consciously consider the holiday gift-buyer and the actual eater/consumer as your 2 primary audiences and market accordingly.
posted by I_Love_Bananas at 4:00 AM on October 9 [3 favorites]


I'd suggest selling them all for $10 and then buy three get the fourth free. The tiered pricing would bug me. If you have two sizes, do the smaller ones in a bigger bundle, e.g. buy five get the sixth free. A fancy wood box or container plus this "sampler pack" idea would definitely get me buying these as gifts.
posted by rpfields at 7:42 AM on October 9


I like what bbqturtle says. I would add that offering too broad a variety of deals combinations on what should be a simple decision (which sauce or sauces do I want?) makes the consumer think more about what they're spending than on what they're getting. Definitely experiment with the pricing, broaden or narrow your product range as you see fit, but keep to a minimum the deals and discounts at any event.

As somebody who frequents farmer's markets and fairs, I have to say it's really awkward to hang out at a table while deciding what to buy, and can actually get frustrating if analysis paralysis sets in while other people are also moving past your table or through your tent. I'm already more interested in your product than in the products at the tables on either side of you. So making your products easier to buy is more useful to me than challenging me to find your best deal. If I wanted a game I'd go to the midway. Help streamline the decision-making for the consumer, because they're going to be happiest when they've bought your thing and then moved on to the next interesting-looking table.
posted by ardgedee at 3:52 AM on October 10


Yeah, since you do most of your business at live events, this seems like a perfect opportunity for A/B testing. At your next event, do the buy-three-get-one-free thing. At the one after that, try $9 each. At the one after that, try 4 for $30 or whatever. Then compare your sales at each event. If you can track conversions (i.e., the ratio of people who buy to all the people who stop by your booth), that would be even better.

Honestly, though, I kind of feel like it won't really matter much. If I had to bet, I'd say your numbers will probably be pretty similar. If the product's good and it's not ridiculously overpriced (anywhere in your range sounds reasonable to me), I'd probably buy it regardless of price. And I think there are others like me.

I am also just going to point out that $6.66 per bottle is a price point that has a lot of marketing possibility in the hot sauce industry.
posted by kevinbelt at 4:52 AM on October 10 [1 favorite]


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