B2B Marketing Promotions

Digital promotions are a great, low-cost way for marketers to promote their products, and increase brand awareness by offering Freemiums to consumers. These incentive promotions can reward people for buying the product (“buy 9 coffee drinks, get your 10th one for free”), can introduce your product to customers (“download a free track from our new album to see if you like it”), or can even allow you to promote your product to others by giving it away for free (“get free skins for the upcoming Watchmen movie for your iPhone and iPod Touch”).

Digital promotions can take a number of different forms, whether it’s an online gift certificate to your customers’ favorite online or brick-and-mortar retailers, free music downloads from iTunes, or even a real plastic gift card to an online store.

The cost of digital promotions is much lower than the other promotional incentives, because your cost is basically the value of the item you’re giving. If you give $10 online gift cards, your cost is $10 per card. This is a welcome change to promotional incentives professionals who would have normally spent a lot of money on graphic design, production and printing, and mailing and distribution.

Whatever form your digital promotions take, it’s an effective way to increase awareness for your brand, and track sales as well. With digital promotions like an online gift card, you can track who received your card, when they redeemed it, what product they were interested in (useful if you’re giving away several different kinds of music), and even if they purchased the actual product you were selling.

Do you have users who only redeem your digital promotions, but don’t actually buy anything? You can drop them from your incentive promotions campaign, and find a new batch of potential customers. Then start tracking and dropping until you’re only giving your digital incentives to a group of people with a high purchase percentage.

So how can you use digital promotions to gather valuable data about your customers? Not only are you able to track individual customers, but you can ask them for additional information like a working email address (you have to email them the digital promotions cards, right?), what products and brands do they usually buy, and what kinds of products they use.

For example, a music producer has several artists on his record label. He uses a digital promotions campaign to promote each of his artists, and offers a free track from any of his artists. For a user to take advantage of these digital incentives, she has to fill out a survey that tells the producer what kind of music she likes, how much she spends on music, and where she usually purchases it.

The producer can then aggregate the data from these digital promotions and see that most of his customers are between 18 – 24, like R&B, and purchase their music on iTunes. Now, he knows he needs to find more R&B artists, and promote them on iTunes rather than trying to produce and distribute CDs to various music stores around the country. Without using and tracking his digital promotions, he would never have access to this kind of information.

Now let’s take it one step further. Armed with this information, the producer can send out future digital promotions that are individualized to each customer’s tastes and preferences, rather than sending out a bunch of generic information and hoping the customers will take the bait. He can create digital promotions that use variable data to customize the offers, so each customer will see the music that he or she likes, and will receive offers that are more likely to be accepted by them.

Let’s recap: if done correctly, digital promotions can be a great way to market your product for a lower price than regular promotional incentives, to track customer responses, and to customize further digital incentives, to increase response and purchase rates.

Chris Anderson, editor-in-chief of Wired Magazine and author of The Long Tail, has turned the idea of free on its head with his new book, Free: The Future of a Radical Price.

In it, he talks about how Free is often used as promotional incentives as a way to get people to buy them. Free is often an integral part of marketing promotions, used as a way to get people to try our products, to buy something else, to showcase our products or services, and even to do some work for us.

Here are the four basic iterations of Free Anderson discusses in his book.

1. Direct cross-subsidies - This is a product that gets you to pay for something else. It could be a buy-one-get-one-free item at your favorite clothing store. Or a free “prize” given to you by a car dealership in the hopes of getting you to buy a new car. Or even a cell phone company giving you a free cell phone because you’ll pay for the minutes, the text plan, and the data package.
2. The Three-Party Market - Someone else pays for you to have access so you can use the program, in order for you to be exposed to their product. In other words, your basic television and radio mass media setup. I get to watch NBC’s “The Office” for free. The catch is I have to watch the ads that go with it. Or I can subscribe to a free trade magazine that covers my industry. The catch is I have to make my name and address available to people who want to send me direct mail. The advertisers need us to consume that product, but we need the advertisers to pay for our access.
3. Freemium - One of the models we’re most familiar with: we get a free sample to try a product: the food samples we get at our local supermarket, as a way to entice us to buy the really huge bag of pizza rolls. Or in the digital world, giving us limited access so we’re willing to pay full price for total access. Anderson uses Flickr.com as an example. We can use Flickr for free, but can only include 200 photos in our general timeline. If we want to have all of our photos available, and/or we want some premium features, we need to pay $25 per year.
4. Nonmonetary markets - The idea that people give away things with no expectation of payment. Wikipedia is one example. Hundreds of volunteers have created millions of articles in 10 languages about a variety of topics. Wikipedia doesn’t charge for this access, it’s free. Sure, they’ll take donations, and in fact, this past Spring, they had a donation drive to help cover the costs. But there’s nothing else. No banner ads (three-party market), no limited access (freemiums), and no direct cross-subsidies (“get Wikipedia free if you buy a copy of Photoshop”)

It’s this last version of free that most people are becoming used to, and this latest version of free that Anderson wrote about. Since marketing promotions in the digital world is cheap and easy, there are different ways people can use them to promote their services (i.e. a Freemium).

For example, a consultant posts free articles on their blog as a way to not only showcase their knowledge, but to get a potential client to consider them. Or a book author who offers an audio version of his book on iTunes (also free) and on the Kindle, knowing that if people get the free version, they’re more likely to pay for a real copy too. This last technique is the latest promotional incentive to hit the publishing world, and one that more and more authors are using to boost their own sales.

What kind of promotional incentives are you using to drive customer traffic? How are you getting sales leads? Have you thought of using free items as a way to do this? Leave a comment in the comment section.