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How Companies Manipulate Us With Bonus Offers

How Companies Manipulate Us With Bonus Offers

By    |   Thursday, 09 July 2020 10:15 AM

Buy one get one free! Get a free gift with $75 purchase! $200 cashback offer! 25% extra!

Ever been tempted by one of these advertisements? Hey, we all have, that’s just the human brain going ‘reward, reward!’ or ‘great deal!’

Bonus offer reward advertising has deep roots in psychology, whereby we are manipulated into taking an option because of the bonus reward. For instance, despite knowing that we can get a better cocktail down the road for almost half the price, we’re compelled to go after that buy one get one free deal.

The first company to offer a coupon was Coca Cola. In 1887, they offered a free Coca Cola voucher - and we all know how that story goes. The brand is now the best-known soda across the globe, and other companies have followed suit with this approach ever since to try and emulate the success of the deal.

How companies manipulate us into spending more money

One of the ways that companies get us to spend more money than we typically would have is by giving a bonus offer that is only valid if we spend a certain amount. For instance, if we get a coupon if we spend over $100, and we have $85 worth of products in our cart, we are compelled to spend $15 more on something we wouldn’t normally have purchased - just to bump up our total sale and get that coupon.

This is despite the fact we never would have spent over $100 without it. This can also be a good way for companies to offload small ticket items - particularly if they are suggested at the online checkout, or as you’re cruising through the cash registers at a retail store.

The credibility of the bonus offer

How persuasive a bonus offer is to a consumer has a lot to do with credibility. If a bonus offer isn’t credible enough, then we are unlikely to make a purchase to begin with.

Credibility comes in a number of forms:

How believable is the deal?

Deals that sound like they should be too good to be true can decrease the level of credibility in the offer. This could be, for example, buy 1 get 3 free. This leads us to believe that the company pays so little for the product themselves they can afford to practically be giving it away.

How credible is the company?

A big-name brand that has a good bonus offer going is always going to be more compelling than an unknown brand, or those that have suffered a reputation hit. For example, if a clothing company has been in the news for low quality, a bonus offer of 75% off is going to be significantly less compelling than if they had run the offer before the news piece came out.

How often the brand runs bonus offers

When brands run bonus offers too often, this makes consumers less likely to make a purchase. “Oh, I’ll just grab it the next time the offer comes around.” Scarcity creates a compulsion to purchase - just look, for instance, at the Black Friday and Cyber Monday sales.

The perceived value of the bonus offer

If the bonus offer gives the purchaser a smaller perceived kickback - perhaps 10% free on a low-cost item, “1 in 10 chance to win $5!” - then there is less compulsion to make a purchase. Much as the company cannot give away too much, they cannot give away too little.

What is the spend to access the bonus offer?

Unless you’re in the market for a premium couch or home furnishing, a deal like “Spend $5000 to spin our deal wheel!” isn’t going to appeal. Another one is casino wagering requirements that mean you have to play through money a ridiculous amount of times to cash out, one of the unfair bonuses that can be identified in casino play. The amount of the spend should be accessible to the average consumer, or there won’t be many people taking up the offer.

The consumer themselves

In the end, it all boils down to the end consumer. Everyone is different and will have different purchase compulsions, meaning there are various different user types. For example, someone who uses Dove soap every day will be more than happy to purchase extra bars of soap whenever an 11% extra free bar deal comes along, versus a different brand user who may not even blink an eyelid. Similarly, some people will think buy 1 get 3 free deals are amazing.

Companies like to strike the right balance across these aspects to try and lure us in with their bonus offers.

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Buy one get one free! Get a free gift with $75 purchase! $200 cashback offer! 25% extra!
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2020-15-09
Thursday, 09 July 2020 10:15 AM
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