One of the most popular consumer trends driving purchases and consumer sentiment in today’s market centres around brands being sustainable and environmentally responsible.
At Insyt, one of our most popular promotion mechanics encourages and encompasses this approach – the Trade-In promotion. It appeals to customers who are increasingly environmentally conscious, and we’ve seen some impressive results while running them for our clients.
Here we delve into more detail on Trade-Ins – what they are, how they work, and when the time is right to roll them out for your business.
How does a Trade-In promotion work?
Trade-In promotions encourage customers to upgrade an older version of a product with a newer one – the benefit to them is a discounted price for their new purchase that stems from trading in their old device.
Trade-Ins are particularly popular in consumer electronics markets, such as mobile phone handsets, PCs or laptops, where technology changes so frequently and customers are often looking to upgrade their hardware in a cost-effective way. This promotion type can also be used to drive sales of these newer models or, in especially competitive markets, brands encourage consumers to trade in rival products for their own.
What are the advantages of Trade-In promotions?
One of the main benefits of a Trade-In promotion is that it encourages a more sustainable way of buying new products.
Old products that are traded in can be refurbished and reused – either to be sold on or donated to charities or other good causes as part of your business’s corporate social responsibility programme – rather than just sitting in a drawer or going to landfill. In many cases the value of these trade-ins to your business will help offset the cost of the reward paid
out to the consumer, not to mention the additional consumer behaviour information about what people are upgrading to (and from).
The other key benefit is the potential longevity of a Trade-In when compared to other promotion options. We often see the best results when Trade-In promotions are supported across a longer period, as opposed to more time-limited quick hits like Cashback promotions.
What are the disadvantages of Trade-In promotions?
Trade-Ins are very effective across many different markets, from consumer electronics to appliances to cars, so there are very few industries where we might discourage their use.
However, we generally advise our clients to steer clear of using Trade-Ins in conjunction with deep price discounting or Cashback promotions because the increased expense of operating them together can negate many of the benefits.
The other logistical aspect to consider is what to do with the products you receive back. When considering a Trade-In promotion, we always stress the importance of helping our clients choose something that either appeals to your bottom line or as a selling point to consumers (eg. “Your old phone will be refurbished and donated to a developing world charity”).
When do Trade-In promotions work best?
Trade-Ins are very effective in supporting the launch of a new product in a range that has already had wide consumer uptake, and they’re a particularly strong mechanic if your brand is keen on encouraging or bolstering customer loyalty.
We have seen uptake for some clients as high as 30% from running this type of promotion effectively and intelligently.
When should I consider an alternative to Trade-In?
Industries where there is little value in old products, or where old products cannot be re-used because of hygiene, are generally not well suited to Trade-In promotions. Similarly if the product has low market penetration then Trade-Ins can be equally limiting in their effectiveness. Few customers will already own the product you are encouraging them to exchange for your newly-released product, so a different promotion might hold greater benefit for you.
That said, Trade-Ins still shouldn’t be entirely ruled out either. Many brands with a limited market footprint have run them to great effect by encouraging
customers of rival products to try their brand instead.
Insyt is your promotions agency with intelligence. We offer a wide range of bespoke promotions solutions, including Trade-Ins, that can help boost
your sales, brand sentiment or customer loyalty. Get in touch with us today to see how we can help your business: email@example.com