Creative Discounting

As we have learned in class, pricing can be a key way to reach customers. The price of a product or service can communicate a lot of things about a brand, but particularly, it suggests value. So what are some creative ways companies have played with pricing in order to send a message to consumers? Today's post looks at a few innovative discounts that help communicate value, engage customers, and break through all of that advertising clutter.

(#1) Starbucks Early Bird App

Starbucks has done a lot of things right when it comes to branding and customer engagement. One of the company's newer innovations has been the Early Bird App. The following video explains the way the app works (if you don't have time to watch, don't worry, I will give a basic run down below):

Starbucks EarIy Bird from Mate Nagy on Vimeo.

 So, the idea is for you to use the app as your alarm clock each morning (which means you're engaging with the Starbucks brand at least twice per day). When the alarm sounds, you can choose whether you "Wake Up" or "Snooze." If you decide to wake up, you are given a reward, which you can save and stock up on or use each morning. You have to visit your local Starbucks store within one hour of pressing the Wake Up button in order to receive the discount (which provides extra incentive for customers to go to the stores). And the age-old saying stands true with this app: if you snooze, you lose. That is, if you decide not to wake up and hit the Snooze button, you do not receive the discount, but you can try again the next day; and of course, you can still hit up Starbucks on your way to work and pay full price. In all, this app encourages you to get out of bed and seize the day with a cup of Starbucks coffee, by helping you break bad habits and providing an enhancement to the tool we are already using every day, the alarm clock on our smartphones. What's more, by encouraging customers to go to S-Bucks within an hour of waking up, the company essentially creates a happy hour effect, bringing more people in at a time when store traffic is low, and thus reducing the pressure during morning coffee rush hour. Another fun fact about this app: it was created by students!

(#2) BIOMAT Pop-up Restaurant

This idea was executed in order to motivate other restaurants to adopt a more sustainable model. The pop up restaurant popped up in Austria as part of Vienna Design Week 2013. Its unique discount model involved a meal discount proportionate to the weight of bio-waste donated by patrons; one kilogram equals one euro off the bill. The restaurant's kitchen used biofuel made from the biogas emitted from the bio-waste as its energy source. The result is a win-win-win situation: customers win by receiving a discount on environmentally-conscious food (and get to pat themselves on the back by contributing to sustainable energy), the restaurant wins by receiving a free energy source, and the environment wins by receiving less waste in landfills and having less fossil fuels burned into the atmosphere. Whether you value green business practices or not, I think we can all agree that this is a clever way to incorporate discounts that benefit both the customer and the company.

(#3) Troop ID

This discount service is aimed directly at those who serve or have served in the military. I found this one interesting because service members and veterans are a segment not often targeted; yes they are often celebrate in advertising, but I haven't seen many products specifically for them. In addition, having many friends and family who have served in the military, I've always been somewhat bothered by the awkwardness caused when one of them had to ask if a certain establishment offered a military discount. Well, Troop ID offers a clever solution to this problem. It provides a way for military members to verify their military IDs online and then be notified of the various discounts and exclusive offers available to them. The video below offers a nice explanation of the service. While the company's logo could use some work (yikes!), I found the idea to be a viable solution to a problem faced by veterans and military members.

There were a lot more creative uses of discounts I encountered when researching for this post, but I will keep it somewhat short. What I hope to have made more obvious, though, is the importance of incorporating discounts in a marketing plan. Who doesn't love the feeling of getting a deal?