Selling Points: Optimizing E-Commerce

Lisa’s blog entry last week about purchase incentives used by software companies inspired me to think about effective strategies that other industries use to increase sales and attract more customers—and how every online retailer can benefit by adopting a similar approach.

A few months ago, Comcast used an extremely compelling purchase incentive: For three weeks, they offered a free Nintendo Wii™ to new customers who signed up for Comcast’s Preferred Plus or Premier Triple Play package (you can read the press release here).

This special offer was successful for several reasons:
1. The purchase incentive was compelling enough to attract new customers not only because of its several-hundred-dollar value, but because the immensely popular game console was in short supply.
2. The offer was time-sensitive, which called for immediate action on behalf of the customer.
3. The free product offered was complementary to Comcast’s service; Customers could connect the Wii to their new high-speed Internet to challenge other players on the Web.

Comcast surely acquired countless new customers by offering this purchase incentive, but what was in it for Nintendo? A valuable marketing opportunity to partner with the largest cable operator in the United States. Plus, Comcast most likely paid Nintendo a small fee for each console. Given the volume potential here, Nintendo stood to make a considerable profit even if they received only a fraction of the Wii’s retail price from Comcast—not to mention the revenue Nintendo will continually generate from selling games to their new customers.

Have you seen any great purchase incentives lately? E-mail them to us at blog@trialpay.com.

--Alex Rampell

When software companies launch new products, they often undergo the painful task of offering discounts in order to generate consumer interest—which risks the chance of instant brand degradation. But a few years ago, when I handled e-commerce sales for a small software company, I offered a purchase incentive that allowed several top software companies to avoid implementing discounts in their product launches—and built a name for my brand in the process.

I let these large companies offer my product—a $19.95 value—for free with the purchase of their software, as long as they paid my company $1 for each sale. This bold move allowed name-brand companies to sell their product at full price while still giving customers a great deal. The perceived value of this incentive to the customer ($20) was far greater than the actual cost for the company ($1). And getting a $20 product for free exceeded any internal purchase incentive that the company could have offered, such as giving a 20% discount that could cost the company $10+.

Prior to implementing this marketing strategy, my company’s monthly online sales average was akin to what major software companies earn in a few days. But offering my product as a purchase incentive helped raise my company’s monthly online sales by an astonishing 430%. I boosted my brand by association with some of the best-known companies in the industry and exposed my brand to a significant volume of high-quality traffic that would take years to accrue organically. Plus I acquired tens of thousands of valuable names for my mailing list and added hundreds of thousands of new users to my base with renewal potential in years to come. Original Equipment Manufacturer (OEM) deals and large volume sales pay out at a similar rate to purchase incentives, so this strategy learned by my small software company would benefit software companies of any size.

However, the benefit of purchase incentive partnerships extends beyond software and certainly isn’t limited to complementary products (bundling software purchase incentives to software products). For example, at a time when many consumers are planning holiday travel, a $50-off coupon to an online travel site such as Travelocity or Priceline would encourage customers to complete just about any online sale, from software titles to newspaper subscriptions, from movie tickets to restaurant gift cards. And this arrangement would surely benefit the travel site that gives away the $50-off coupon, knowing that the cost of a flight or hotel stay is significantly higher than the $50 discount.

TrialPay maintains a network of purchase incentives just like these to connect thousands of companies across many industries, creating unlimited opportunities to leverage another company’s brand recognition or seasonal promotions to incrementally boost sales. Stay tuned for even more information on how purchase incentives can help optimize your e-commerce sales cycle. Have questions? E-mail us: blog@trialpay.com

-- Lisa Contoyannis
Director of Marketing and PR