Archive for July, 2016

Technique of customer acquisition using channel partners

Few weeks ago when we were doing our regular grocery shopping we found out some interesting offers printed on some of the Kellogg’s cereal boxes “Grown-ups Go Free”

Kellogs - Grown-ups to Free - offer

It’s a very simple and straightforward offer, for every fully paid child ticket you buy on the counter (not online), you get a free adult ticket, with choices of all the top UK theme park attractions, with a validity of 1 year.

The offer was genuinely interesting because it’s summer and pretty much we are planning to go to one or more of the theme parks with kids this summer. It’s kind of a no brainer to save on adult tickets, which are normally around £40. So we straight away brought 6 packs of cereals. Without the offer we probably would have bought one or two, maybe different brands as well.

It was just puzzling on my mind, how can a cereal box with less than £5 selling cost can produce an offer worth £40? It must be some kind of brilliant marketing effort or there is a catch somewhere?

The day has come and we decided to go to one of the popular theme parks in the UK “The Chessington Park”, since we had the offer already and that’s also valid only for onsite park entry, I didn’t bother to check the prices online we just turned up on the park and purchased the tickets.

So how did both Kellogg’s and Chessington managed to acquire new customers?

Kellogg’s story is pretty straightforward, they sold more cereal boxes, so if they are not paying anything to Chessington, they simply increased their revenue by printing a small coupon on all their boxes.

Let’s take a look at the story from Chessington perspective. The total price we paid for 4 tickets is £43.60 * 2 = £87.20 + £3 (parking) and additional £60 we spent inside the park. In this case, the £150 is complete new money Chessington managed to generate purely because of the channel partnership they created with Kellogg’s. If you look at the prices below carefully, Chessington is anyway happy with someone paying £27.60 for a ticket with their own early bird offer, so if we booked our ticket 5 days in advance we would have paid £110 without any external offers.

So the cost of customer acquisition for Chessington is around £5/ticket, which they would have spent anyway. Even for their early bird offer they might be spending around £5 on online advertisements like Google/Bing to direct customers towards their website.

Chessington price list Chessington price list

I’m even speculating Chessington might even pay £5 for each converted customer back to Kellogg’s to cover their marketing and operational expenses.

If you look at the whole equation, in this case, every party got benefitted. As a consumer we received the benefit of just turning up on the day and getting a better deal than an early bird offer, Kellogg’s managed to sell more cereal boxes and Chessington managed to acquire new customers/revenue.

Any channel partnerships must be done in a way, every party is getting mutually benefitted, otherwise, the weaker partner will not have the same enthusiasm or commitment in pushing the deal.

You can always pick up interesting business lessons from day to day life.