Making the BOGOF Work in Mobile

David Murphy

Guy Talmi, Senior Marketing Director at Pontis, offers advice on how to successfully deploy a time-honoured sales promotion tactic in the mobile marketing environment

Guy_talmi_new
Buy One Get One Free, (aka BOGOF) offers has been a popular sales
promotion tool for as long as most people can remember. It is one of
the most popular forms of promotion in FMCG/packaged goods and, if used
correctly, can encourage repeat purchase by existing customers and
initial purchase by new users.


As the name suggests, BOGOF is used
to motivate consumers to buy one item by offering another of the same
item for free or at a discounted rate, even if, under normal
circumstances, they would not have bought the item. It is typically
used in the FMCG industry to promote brand loyalty, and is also now
used for digital offers, such as buy one song, get another half price
or download a song and get the ringtone for free. Used correctly, BOGOF
is a powerful tool to help attract new users, and boost ARPU and brand
loyalty, making it essential for the mobile marketers toolkit.
For
mobile marketers, using BOGOF is not as straightforward as it is for
their FMCG counterparts. Supermarkets advertise products on their
shelves, giving shoppers the freedom to pick up two items if they want,
or keep walking if the offer is not relevant. While its easy to
encourage a supermarket shopper to buy two pots of coffee, offering a
mobile user the option to buy identical content twice isnt likely to
work. For instance, a mobile gamer isnt going to buy the same game
twice, which brings forward the challenge that faces all mobile
marketers how can they successfully target and recommend their
offerings to the right users, at the right time?


Discount offer
To promote digital services to existing
users, the most effective method is to send them a discount offer, or
other benefit, relating to the content they have purchased previously.
For instance, if a user has downloaded a song by the Spice Girls, then
the marketer can send a BOGOF offer for songs by the Spice Girls, or
from the same pop genre. The items in the BOGOF offer can come from
different product lines or even partners, as long as they are relevant
to the user.
The best way for mobile marketers to take advantage
of the BOGOF concept and encourage repeat purchases is to give users a
broad yet targeted choice. Instead of offering BOGOF for only one
product, mobile marketers can target users with an offering such as:
Buy one game and get another game from the same category free. That
way the user isnt limited by the offer, making it more appealing.
For
users who are yet to make their first purchase, the most effective
approach is to offer them a generalised BOGOF to see what content they
purchase. Their preferences will be unknown to the marketer and so
recommendations to download content would be out of the question.
Offering something for free will help push the new user to download
content for the first time. The marketer can then monitor the choice of
content in order to make the next offer more targeted, promoting repeat
purchases. 


Stock clearance
In the FMCG market, BOGOF offers are often
used during times of stock clearance. But mobile marketers dont have
stock clearances and, unlike supermarket managers, they often dont
have the same flexibility to set the price of items, due to factors
such as revenue share models with content providers, and other
limitations, including the  flexibility (or lack of) of billing systems.
In
order to get the best out of their promotions, mobile marketers need to
make the most of all the customer information they have. By monitoring
user purchases, mobile marketers can provide personal, targeted offers
that pack more punch then those made by their supermarket counterparts.
In addition, by offering BOGOFs to new users, marketers can gain the
information they need about user preferences. This can then lead to new
users becoming active users and increasing brand loyalty and ARPU for
operators.