Jan 18, 2023
4 minutes to read
The ‘buy one, get one free’ deal (abbreviated as BOGO or BOGOF) is one of the world’s oldest promotional techniques. It’s simple, effective, and popular.
But, for many businesses, the standard BOGO format isn’t exciting or enticing enough. Firms need a twist to stand out in the modern business landscape, where increasingly businesses are gamifying their promotions.
The earliest references to ‘buy one, get one free’ is from 1721, when Richard Bradley’s book ‘A Philosophical Account of the Works of Nature’ was offered under a buy seven, get one free deal.
The BOGO deal as we know it first reached mainstream popularity in the 20th century, with widespread attention brought to the concept when Procter & Gamble began issuing metal coins in 1920, which could be redeemed for discounts or buy-one-get-one-free deals
Traditionally, BOGO deals are most commonly applied to food products and other low value consumer goods in supermarkets. These low cost items have a low threshold in terms of purchase intent, and the offer of ‘free’ can wildly shift customers’ perspectives.
They’ve also seen use in other consumer environments. At one point, General Motors dealerships ran a BOGO deal on cars. Customers could get a free Chevrolet Aveo when they bought a Chevrolet Tahoe, Trailblazer or Suburban. Florida’s Senate even passed legislation to offer BOGO on STEM courses for university students.
However, the BOGO promotion in its standard format can be a bit underwhelming.
The clever trick behind the ‘buy one, get one free’ deal is the fact that the customer never really gets the second item for ‘free’.
Businesses change the prices of their products regularly, and most increase the price of products before they introduce a promotion. This means customers often pay more than the normal full price of one product under a BOGO deal.
BOGO deals can also lessen the perceived value of a product in the consumer’s eyes. Generally, the higher the value of the product, the less suitable it is for a BOGO deal.
To capitalize on the tried-and-tested BOGO format, businesses should consider putting a modern spin on it to make it more appealing.
Ultimately, the underlying concept behind all of these promotions is:
Buy X, get Y in return
You can swap X for any product or combination of products, and swap Y for any combination of products or another incentive (discount, coupon, etc.).
“Buy two tickets on the same flight, get 50% off car hire at your destination”
This example could help airlines attract customers with the promise of cheaper car hire. Instead of offering a discount on tickets, the airline would offer them at full price. They would then refer customers to an affiliate car hire company at their destination.
“Buy item X, get a discount coupon for the value of the item to use on your next shop”
This BOGO-style promotion is aimed at customer retention and increasing average order value. Because it includes a delayed incentive (i.e. the coupon has to be used on their next purchase), customers are much more likely to revisit the store to claim it.
Delayed incentives are effective at encouraging repeat purchase behavior. The customer still gets their free product/discount, but it’s not available immediately.
The promotion examples above work best if they’re personalized by business and customer segment. Personalization resonates with customers because they get better, more rewarding deals.
But it’s no longer an unusual or industry-leading technique. Personalization has become the norm across many B2C sectors. A survey conducted by IDC Retail Insights revealed that the majority of retailers in France, Italy, Spain, the UK, and the US view personalization as an essential practice.
Shoppers love personalization because they get more relevant deals and rewards. According to Marketo, 79% of consumers say they’re only likely to engage with a brand’s promotions if they’ve been personalized around previous interactions.
Alongside personalization, businesses should consider things like best selling products, promotions and offers being run by competitors, seasonal trends etc., when planning promotions.
Best selling or signature products are often a huge draw for customers. A promotional campaign that offers customers a better deal on a best selling product can be a great inroad to additional sales.
Seasonal events are a huge driver of consumer activity. The last three months of the year account for almost 40% of all online sales. This makes them prime time for promotional campaigns (Halloween, Black Friday, Christmas).
Running similar promotions at the same time as competitors reduces your chances of winning customers. Offer unique deals that will persuade your customers to shop with you instead of rival brands.
Offering customers a choice in a promotion is a great way to cover different customer bases and segments. If, for example, you run a promotion offering a free product when customers buy two of product X, you could offer a selection of three different products as the free item.
Alternatively, if a business has a new product that they want customers to try, they could offer it as a free item in a BOGO-style promotion. Creativity is key if you’re trying to reinvent the BOGO deal, so don’t be afraid to try something different. Chances are your customers will respond well if you’ve thought your promotion through.
To find out more about promotions and the many ways they’ve been used by ecommerce businesses during the pandemic, check out our white paper on 'Promotions and the Changing Face of eCommerce'.
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Loyalty & promotion expert at Talon.One
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