MAXIMIZING REVENUES

Maximizing Revenues: Two-for-ones will jump-start any business

 
 
Adam Snitzer
Adam Snitzer

Special to the Miami Herald

The great Don Corleone could be very persuasive. “I’m going to make him an offer he can’t refuse,” he famously said in Francis Ford Coppola’s masterpiece film The Godfather. And while Don Corleone’s methods were too draconian for most of us, his wisdom was irrefutable.

Especially for those of us with products to sell. If we want to drive demand, we need to devise promotional offers that our customers simply can’t refuse.

Marketing history is filled with techniques for motivating consumers to open their wallets — right now, before it’s too late. Some of my favorites include:

• “Free gift with purchase while supplies last” — such as the cosmetics case stuffed with free samples when you buy perfume. Where would Clinique be without its signature offer?

• “Limit 3 per Person” — which creates a frenzy as people worry that if they don’t act immediately, they’ll miss out to someone else.

• “24 Hour Sale” — so you’d better hurry up and buy today because tomorrow you’ll have to pay full price.

• “Florida Residents Only” — which makes us feel like privileged insiders, with exclusive access to low prices that most people can’t get. Think Disney or Universal, or any cruise line sailing round-trip from a Florida port.

• “Buy-One-Get-One-Free:” This all-time “Godfather’’ of sales offers is so beloved that we even have affectionate nicknames for it: a “twofer.” Or a “BOGO.”

The BOGO is so irresistible that it has been nearly banned in Britain. Researchers and consumer advocates there have pinned rising obesity rates on buy-one-get-one-free deals on snack foods and sugary drinks.

Closer to home, here in South Florida, drivers can see billboards on I-95 with the simple message: www.publix.com/bogo. The local supermarket chain makes a big deal about its BOGO offers, which cover up to 50 or more products each week, ranging from fish sticks to cleaning products to tea bags to organic lettuce. The BOGO works great for Publix because it encourages customers to try new products or to stock up on their favorite items, and then use more of them.

Miami-based Prestige Holdings, owner of Oceania and Regent cruise lines, has perfected the art of the “two-for-one” message. The company’s long-standing two-for-one promotional strategy has led to domination of its cruise segment and enough demand to justify building new ships; it recently announced plans to take the company public.

So why is it that consumers can’t resist the two-for-one offer, whether it applies to bottles of extra virgin olive oil at the grocery store or ultra-luxury vacations to exotic locations?

The answer is a bit of a mystery, linked to a fuzzy part of consumer psychology that no one fully understands. The BOGO touches an emotional chord that goes beyond logic. In fact, studies show that the buy-one-get-one free message is even more motivating than a 50-percent-off or half-off message, which are mathematically the same thing. Turns out we buy based on gut instinct, and getting one item for 100 percent off is more satisfying than getting two items for 50 percent off. Go figure.

So if sales at your company need a boost, reach for the single most effective offer of all time, the one that will get your customers buying two at a time and bragging to their friends about your great deals.

If your restaurant is slow on Tuesday evenings, offer two-for-one bottles of wine. If you cut hair, offer two-for-one kids haircuts between 2 to 5:30 weekday afternoons. And if you’re already offering merchandise at 50 percent off, shift your message to a “twofer” and watch your sales soar.

Maximizing Revenues is a new Business Monday feature by Adam Snitzer that will appear each month. Snitzer is a revenue strategy expert and president of Peak Revenue Performance, a consulting firm that specializes in designing and executing innovative pricing strategies. He can be reached at adam@peakrevenueperformance.com, or via the company’s website at Peak RevenuePerformance.com

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