Is BOGOF a curse or a great trial gaining tool

We have spent a lot time with our clients looking at these value offers.  We have seen some really difficult situations arise as a result of both the brand and the consumer becoming addicted to value offers.  What starts out as a simple idea to help the business hit sales targets in a difficult year, then starts to eat away at the business and soon the "offer price" becomes the "normal price" at which 70-80% of the volume is sold.

So when Marketing reported that the IGD found 25% of consumers have tried a new product as a result of a BOGOF,  we were provoked to write to Marketing.  The editor seemed surprised by this finding.  We were not.  Why should this be a surprise?   Some really thorough and objective research by Andrew Ehrenberg has found that brands only get more growth when they attract new trialists AND get previous buyers to buy more often.   Growth is always due to greater penetration and increased purchase frequency.  It is just not possible to attract loyal consumers to buy more often without persuading new users to try the brand as well.  The two thing always happen together. click here for articles

The other interesting observation is that trial is always the best way to produce brand growth as confirmed by the IPA analysis of marketing effectiveness.  Programmes which had loyalty as the objective "underperformed on every single business metric".  Whereas trial programmes were more effective.

So if trial is the goal and BOGOF’s produce trial, maybe they are a good idea?  But the IGD states "people buy the BOGOF and do not come back".   This leads to BOGOF becoming a drug.  Value offers become the only way to hit volume targets, but they train buyers to wait for the next offer.  So brand owners and consumers get addicted to them, when the real question is why is the product is not attractive at the normal price? 

In contrast, the fastest growth is often in premium markets.  I get regular Google updates on "premiumisation".  Every week someone declares this is the reason for stronger sales growth.   Maybe there is another way.  Find out what buyers really want, because when you do, they will pay more for it and you will sell more of it

See our Power Propositons case study for a great example of moving bags of compost away from value offers to premium products.