Sleep is the new commodity, and it’s booming. According to Digiday, the online mattress category has swelled to 150 players, and the global mattress market is expected to reach $43 billion by 2024.
In a space this saturated, the pressure is on for both incumbent brands and new entrants to rise above the noise.
For Purple, a “comfort product company” best known for its Purple Mattresses, the challenge was clear: even though revenues were up 40%, the company knew that to maintain momentum, it had to move beyond traditional customer acquisition strategies in order to reach new audiences and stand out.
Universal Discounts Limit Differentiation
Our recent survey indicates that marketers’ greatest challenge in acquiring customers is competitive differentiation. And retail marketers in particular are feeling the squeeze: 81% reported feeling greater pressure to meet their customer acquisition and revenue goals than the previous year.
Many retailers have responded with universal discounts. Three in four retail marketers run either weekly or “continuous” discounts, and nearly 70% believe running more will help increase sales. Unfortunately, it won’t. Frequent promotions lead consumers to expect discounts, which devalues a brand, threatens margins, and makes standing out from competitors even harder.
In this modern marketing landscape, innovative brands like Purple are eager for a more targeted, sustainable approach.
Driving Customer Acquisition with Gated Offers
In 2019, Purple launched a gated, exclusive offer for the military giving 10% off to all active duty service members, veterans, reservists, retirees, members of the National Guard, and their families.
Honoring the military with a special discount helps Purple stand out in the minds of service members as well as everyone who supports them. Ninety-four percent of current and past military personnel and their families who were surveyed say they notice when brands are “military-friendly” and have a positive impression of those companies.
A gated military offer also holds more power than a universal discount. In a survey conducted by Kelton Global, 68% of consumers said gated offers have greater appeal than discounts intended for everyone.
3 Ways Digital Verification Fuels Customer Acquisition
Purple implemented their gated offer with SheerID, a platform that digitally verifies the military status of consumers who want the discount. Members of the military enter a few pieces of information, and SheerID uses authoritative data sources to instantly confirm their eligibility.
Digital verification is a smart strategy that empowers brands to acquire and retain more customers.
01 Digital Verification Increases Conversions
Purple previously provided a military discount, but shoppers had to call in to customer service to redeem the offer, which isn’t user-friendly. Manual verification is time-consuming and burdensome for both customers and brands.
Digital verification makes verification easy and instant. The process occurs at the customer’s convenience and takes place entirely within Purple’s brand experience. This prevents offer abandonment, increases conversions, and drives purchasing behavior. Eighty-two percent of consumers say a gated offer would increase how often they shop with a brand.
02 Digital Verification Drives Long-Term Loyalty
Accessing first-party data is key to any personalization strategy. Using SheerID’s platform enables Purple to easily build a direct relationship with its consumers because the company:
- Controls the data.
- Can create personalized promotions to endear shoppers to the brand.
- Knows customers have opted-in to the relationship by redeeming the offer.
Brands can even tie their gated offers to their loyalty programs to facilitate greater engagement. Lowe’s linked their military gated offers to their MyLowe’s program and saw a 2-3x higher engagement rate.
03 Digital Verification Maintains Offer Integrity
Using digital verification to gate the offer also makes it possible for Purple to broadly promote it without having to worry about fraudulent redemptions, which can reach as high as 35% for some companies.
This level of fraud kills margins and erodes hard-earned brand value. Almost 20% of customers said that knowing a brand allowed customers to wrongfully redeem an exclusive offer would negatively impact how they interacted with the brand.
Marketing to the Military with Gated Offers is Smart
For a brand like Purple that is committed to “helping people feel better” and giving back to communities, targeting the military is an intelligent market segmentation strategy. The military community is poised to shop for new mattresses because they change addresses twice as often as the average family.
They’re also a large and lucrative customer group, with more than 37 million members who have $1 trillion in buying power. And members of the military on average have a 35% higher income than other consumers.
Making the Military Feel Good
Purple explains the genesis of the company: “Purple is an awesome color, and it signifies treating everyone like royalty.” With their new gated offer, the company is making sure their military customers feel like kings and queens, which they likely will. Our survey showed that gated offers evoke highly positive feelings for consumers: 54% feel rewarded, 47% feel excited, and 35% feel special.
How Top Brands Benefit from Gated Offers
Well-known brands are increasingly marketing to the military with gated offers to drive conversions and loyalty:
Kettlebell Kitchen implemented SheerID’s digital verification to deliver a 15% Hero Discount for members of the military and first responders, resulting in a record number of new customers and growth they wouldn’t have been able to manage with manual verification.
Since implementing SheerID, the number of new military, veteran, and first responder customers signing up every week has increased by 83%, and the number of Hero Discount subscribers has increased six-fold.
T-Mobile’s gated military offer is part of a comprehensive military initiative designed to increase revenue and brand awareness. In 2018, T-mobile delivered its best financials ever, attributing it in part to “the growing success of new customer segments” such as T-Mobile ONE Military.
American Giant’s military email promotions—implemented with SheerID—are their best performing campaigns, with more than 6,000 unique orders placed in 2018 alone.
Paulina Izvorski, American Giant’s retention marketing associate, said: “Our high-quality, made-in-America products appeal to the military community. And the discount we offer generates greater conversions and deepens the brand relationship because it demonstrates how much we value them in a way that a universal discount just can’t.”
Companies using SheerID to verify military status consistently see 3x conversions, 2x repeat purchases, and ROAS as high as 20:1.