Columnists George Prout Applied Marketing 101: The extraordinary power of Gift-with-Purchase offers

Applied Marketing 101: The extraordinary power of Gift-with-Purchase offers

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As I write this, I’m flying east from LAX after an exceptionally successful Leading Jewelers Guild trade show, en route to the RJO Show in Cincinnati. We added over forty Rhythm of Love (ROL) doors in just two days at Leading, as retailers who had become aware of the impending advertising onslaught of the new patented vibrating diamond mounting flocked to our booth, apparently selecting us because of the comprehensive marketing support platform that we have developed for ROL. What wonderful confirmation of the fact that once again, when all other factors are roughly equal, it’s the strength of the marketing tools that gets the sale. What fun!

As I sit here in seat 4E, I’m also thinking about the amazing dinner that I had last night at Katana, an ultra-high-end rooftop Sushi restaurant on the Sunset Strip in Hollywood (why is West Coast sushi so much better than East Coast sushi?), as one of several guests of the owner of Icelink, an extremely expensive luxury watch brand. Andy - the owner - had asked me to apply my creative thought process towards developing a launch strategy for his watches in the US market. They’re selling exceptionally well in the Middle East and Asia, but when he first launched them in America a decade ago, his watches were instantly adopted as status symbols by the Rapper community, and when he recognized that his brand risked being perceived as a “Gangster” product, he wisely pulled out of the States and focused elsewhere.

But now he’s ready to re-launch here, and he had challenged me to come up with a campaign that would generate maximum “buzz” at minimum cost. Thankfully, once my mind had become sufficiently lubricated by my favorite single malt scotch (a most reliable method for getting the creative juices flowing!), I began to free associate, and the ideas came rushing in, including one that we’re now going to implement. I thought you might enjoy learning about what I proposed, and in order to provide insight into the process, I’m going to use this month’s column to elaborate on the source of the power of gift-with-purchase (GWP) promotions.

When you choose to offer a discount (say, $500 off a $2500 item), the part of your customers’ brain that considers the apparent value of that offer is the pre-frontal cortex, an area towards the front of the skull responsible for logical thoughts and computation. Within about 4 seconds after learning about the offer, the PFC does the appropriate computational processing, and in a straightforward, logical manner, decides whether it’s worthy of consideration. But there is ample evidence suggesting that from a tactical selling standpoint, when you’re trying to sell something- especially something expensive- this is precisely the wrong part of the brain to activate.

 I learned many years ago that people buy with emotion, and then justify their purchase decision with facts, and from a neurophysiological standpoint, there is abundant evidence that this is precisely what occurs when a consumer makes a big ticket purchase. So the LAST thing you want is to engage the PFC in the decision making process. That’s the basis of why a 20 percent discount generally doesn’t have much of an impact - after all, it’s not very sexy, is it? Instead, what you’d really like to do is engage a different part of the brain, a part that is more likely to actually get excited about the offer. And that’s why a gift-with-purchase offer often resonates far more successfully than a discount. Because you can take the “cost” of the discount, and instead use it to fund a really cool, highly motivational gift for the consumer.

You see, when you offer a GWP, if it’s a really tasty treat, a special set of regions in the brain known collectively as the Reward Center activates and considers the offer.  The Reward Center is heavily wired with powerful interconnections throughout the brain, owing to the fact that it’s also responsible for mediating sexual desire. This is a really big deal, because from an evolutionary standpoint, the single most important task you have as a living organism is to procreate. And while you may not know much about your ancestors once you go back 10 generations or more, there’s one thing that we can definitely say about them: They were ALL sexual all-stars. They were sufficiently fertile to produce at least one offspring, they were successful in finding and attracting a mate, and the odds are that, at least for the vast majority of the past 20,000 generations, they were also pretty effective at pair-bond formation (the creation of a relationship that lasted at least six years, so that babies born from their procreative efforts grew up in a sufficiently nurturing environment such that they achieved the age of 5, at which point a child’s self-sufficiency - and resulting likelihood of survival until sexual maturity - rises dramatically). One thing you learn when you study neurophysiology is that everything remotely associated with sex has a dramatic impact on the way the brain works, so when your marketing activates the Reward Center, where feelings of sex drive and satisfaction get processed, you are far more likely to achieve your desired result.

And that’s why I’ve become more and more reliant on GWP promotions when I really want to have a profound impact on traffic, sales, and “buzz”. Four years ago, when we started testing Black Friday flyers at Gems One, we discovered the ridiculously powerful impact that electronic GWP offers have on our customers’ traffic and sales (and this year’s set of offers is likely to be even more impactful than anything we’ve done in the past). And last summer, after several healthy pours of 18 year old Glenlivet while sitting in Mike Geller’s office at D Geller and Sons in Atlanta, this knowledge led me to propose a Free Rifle gift-with-purchase offer with each engagement ring that led to HUGE sales and national publicity. And last December, we had a number of customers pair a Mercedes Benz convertible lease with a small assortment of expensive diamond jewelry. All of which leads me to what I proposed last night to promote Icelink.

As I sat there contemplating what manner of outrageous offer would be so totally off the wall that it would yield instantaneous “buzz” surrounding Icelink watches, I started by considering the kinds of lifestyle accouterments that would be appealing to the uber-wealthy male consumer who might consider buying an Icelink. It’s actually not easy trying to put oneself in the mind of a consumer for whom a two hundred thousand dollar watch represents a casual purchase. But as I contemplated potential options, it suddenly occurred to me what the right offer would be.

“Andy,” I said as I squeezed my chopsticks around a thinly sliced piece of delectable albacore tuna, “I would like you to select one of your six dial, six time zone diamond watches and name it ‘The Icelink Aviator’. Now what, you may ask, makes the Icelink Aviator different from any other watch? It’s simple - it’s the only watch that comes with a free jet airplane! Now there’s a Unique Selling Proposition!”

My offer relies on the fact that companies like Canadian jet manufacturer Bombardier actually sell fractional ownership of their jets, meaning that you can purchase a small portion of the use of a Lear Jet the way people buy timeshare vacation packages. I had actually researched this years ago when a prior employer was considering fractional jet ownership as a way of transporting high volume clients to our offices in New York. And the cost of a one year fractional ownership of a jet, given the high retail price points of Icelink watches, could easily be hidden as a discount in the price of the watch. Just imagine the glee with which the fabulously wealthy purchaser will brag to his friends that his ‘Aviator’ came with a free jet! More importantly, imagine the news departments all over the US that would pick up the story of the one and only watch that comes with a free airplane. Talk about creating a buzz!

I knew I had hit upon the right idea when my amazed fellow diners enthusiastically applauded, and sequentially high-fived me. I’m now looking forward to discussing this with the folks at Bombardier. Who knows, they may be willing to underwrite a portion of the campaign in order to get a little bit of the “buzz” as well.

Thank heavens for insights from neuroscience (and for the delightful creative effects of 18 year old scotch!).

Class Dismissed!


George Prout is Vice President of Sales and Marketing for Gems One Corporation, and can be reached via e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or at Gems One’s New York office at 800-436-7787.

 
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