Nov 8, 2022 10:30:00 AM | 9 Min Read

Why Contests and Promotions are Key to Your CPG Marketing Strategy

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Why Contests and Promotions are Key to Your CPG Marketing Strategy

You know how competitive the CPG market is. 30,000 new products hit the shelves every year, adding to the already bewildering array of options customers have. To stand out and convince customers that your products are right for them, you must push the limits of your CPG marketing strategy.

That means putting contests, sweepstakes, and promotions at the heart of your efforts.

Why Contests and Promotions are Valuable to Brands

Contests and promotions are a broad spectrum. They range from limited-time contests that generate interest in new products to long-term loyalty initiatives that reward repeat customers.

Common types of CPG contests and promotions include:

  • Instant win
  • Gift-with-purchase
  • Sweepstakes
  • Cashback
  • Punchcards

For CPG brands, contests and promotions offer a wide range of benefits over traditional above-the-line and brand advertising initiatives.

Generate a Buzz

In a saturated market, getting eyes on your brand and generating a buzz around your products can often feel like fighting an uphill battle. Shoppers are creatures of habit. 59% subconsciously ignore new products from unfamiliar brands and stick with the brands they know.

A well-timed contest or promotion disrupts the deep-seated psychological factors that drive CPG purchases and help you generate buzz around your products. Offering valuable and relevant rewards entices new customers who habitually choose the same products month after month and raises awareness among repeat shoppers who may not be receptive to your standard brand marketing activities.

Gift-with-purchase drives brand awareness for Liquid Death

Liquid Death harnessed a gift-with-purchase promotion and its partnership with Live Nation to raise awareness of its range of canned drinking water. Customers were invited to submit their receipts on any qualifying purchase to receive a $15 coupon to spend on concert tickets.

Take customer engagement to the next level with our modular Snipp CARE  (Customer Acquisition, Retention, and Engagement) Platform. Contact us to  learn more.

Increase Engagement

Customer engagement has changed beyond recognition since the golden age of advertising. Historically, TV was the primary advertising channel for CPG brands. Most households had a TV and, with no internet or social media to reach customers directly, advertising your products on TV was the best way to penetrate the market. But TV advertising isn’t as impactful as it once was.

New channels offer new opportunities, and challenges, for brand engagement. Whether it’s rewarding loyal customers with exclusive offers for repeat purchases or harnessing gamification to tap into the average shopper’s competitive instincts, contests and promotions make customers want to engage with your brand.

And as engaged customers are more likely to tell their friends and family about your brand, you can reach a wider audience. Need help getting started? Get inspired by these six successful customer engagement examples.

Instant win and sweepstakes combine to boost engagement for Nescafe

Nescafe’s Get Rich Quick promotion boosts brand engagement by rewarding customers for capturing the moments that matter. Customers can submit a photo of their receipt on any qualifying purchase of Nescafe Rich to receive one of thousands of instant win prizes and entry into a $50,000 sweepstakes grand prize.

Build Loyalty

Customers are spoiled for choice. And while most CPG purchases are driven by force of habit, some customers are more than happy to switch brands if they find better value elsewhere. For example, around 66% of consumers who switched brands last year did so to find the best deal.

Switching brands is quick, easy, and risk-free. Contests and promotions are stepping stones to customer loyalty. The right promotion allows you to satisfy the customer’s need for value while delivering relevant and exciting rewards that keep them coming back for more.

Purchase-based loyalty program gives IAMS customers a helping hand in difficult times

The IAMS Checkup Challenge loyalty program rewarded customers who spent $40 or more on IAMS products with $150 off their annual vet visit. The program, which ended in September 2022, enabled IAMS to show its appreciation for loyal customers and give them a helping hand in difficult times.

Strengthen Retailer Relationships

Partnering with a retailer on a contest or promotion is one of the most effective ways to forge new relationships and strengthen existing ones.

A successful contest or promotion builds incremental in-store visibility for your brand and provides better shelf exposure for your products. Retailers, meanwhile, get a reliable stream of qualified leads and generate additional revenue by making your products more enticing to customers – a win-win situation.

An exciting purchase-based program strengthens Danone Activia's relationship with Sobeys

Danone created an exciting purchase-based program to help Canadian supermarket chain Sobeys increase average customer spend and strengthen their relationship. Customers who spent at least $50 at Sobeys and purchased three or more Activia products in a single transaction could upload a picture of their receipt to the program website to receive a $10 Sobeys gift card.

Create a Data-Driven Feedback Loop

Today’s shoppers expect personalization as standard. According to Epsilon, 80% of consumers are more likely to purchase from retail brands that offer personalized experiences. To deliver these experiences, you must know your customers inside and out.

Contests and promotions are invaluable sources of zero and first-party customer data. Every purchase is a potential window into how your customers think and behave: their motivations, habits, preferences, and pain points.

You can then use your customer data analytics tools to dig deeper into your data and extract the actionable strategic insights that lie within. This creates a feedback loop that improves future promotions to drive further engagement.

Snipp tip: The conversation around your contests and promotions is another key source of first-party customer data. Pay close attention to social media and other brand engagement channels to ensure you don’t miss an opportunity to learn more about your customers.

Why Contests and Promotions are Valuable to Customers

Getting value for money is top of mind for most consumers. This is especially true during periods of global recession when economic pressures force people to tighten their belts. And while the quality of own brands has improved in recent years, many customers are reluctant to buy them. No one wants to be seen buying from the Walmart Great Value range.

The alternative is to shop around for the best discounts. But today’s customers don’t want a handout. They want to feel like they’ve earned something.

Contests and promotions incentivize and reward repeat purchasers. They add an element of fun, competition, and accomplishment that basic discounts lack. The quality, type, and relevance of the reward are the cornerstone of a successful contest or promotion. For example, giving customers a chance to win a tour of their favorite distillery will resonate with whisky lovers far more than a $10 Amazon gift card.

This is also why many brands have incorporated layered promotions into their CPG marketing strategy. It lets you level up your promotions by combining things like instant win with month-long sweepstakes to provide instant gratification and the opportunity to win a bigger prize, like an all-expenses paid holiday.

Think of it this way: Promotions are the carrot; discounts are the stick.

The First Piece of Your CPG Marketing Strategy

The goal of a CPG marketing strategy is to turn heads and draw customers in. It starts with a promotion and ends with lifelong loyalty.

Contests and promotions enrich the consumer experience. They give customers a sense of accomplishment and add an element of fun to the weekly shop. More importantly, they offer more value than a simple discount.

For brands, a well-organized contest or promotion helps:

  • Generate a buzz around your brand
  • Engage customers
  • Build a loyal customer base
  • Strengthen brand-retailer relationships
  • Gather customer insights

Get in touch to discover how our shopper marketing solutions give you the tools to build successful, scalable, retail-agnostic contests and promotions that your customers love.

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Topics: Contests, CPG marketing, Promotions, CPG

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