51% of the population knows what a GWP is… should all marketers?

Is it just me or is GWP one of the most wonderful acronyms ever? Some of you (especially those with a shopping habit like mine, and/or some experience in retail) may know that a GWP,to is a "gift with purchase", a common marketing tool used in the cosmetics industry (hence the 51% though I know not all women use cosmetics...I'm being a little sensationalist today). My recent need to replace one favored berry lip gloss led me to the Estee Lauder counter where I may or may not have said "cha-ching!" out loud when I noticed that they were offering a GWP.

I've never worked in the cosmetics industry, but I think that GWPs can be brilliant marketing and I'm wondering why the practice has such limited application (one exception I can remember was when homegrocer.com was still in business and always included a nice surprise in my delivery). I've been curious, though, about how products for the GWP are selected. Obviously the GWPs are designed to draw in sales. Not sure whose product you want? Go for the one with the GWP. Thinking about trying something new? Act now while there's a GWP. You can take sales away from competitors, you can generate new sales. It's a beautiful thing.

I suspect that there's some customer research that goes into what products go into a GWP. Generally, there's a pretty cheap cosmetic bag. That's a given. If not that, maybe a compact mirror or something. My question is this: are the products selected based on extra products on hand (things that may not be selling as well as expected) or the most popular products? And then, digging deeper, I guess I want to know if the selected products are chosen to make that initial sale (the one that the GWP comes with...which would support the idea of just using the stuff that you have in stock if you feel that people are attracted to the freeness as a concept versus the actual products) or is it to get people to try other products (maybe some of your best sellers or some newly introduced products)? And I want to know if, based on research, products are selected based on color, features or overstock. And what impact GWPs have on overall brand loyalty (I admit it, I am not a one-brand kind of gal).

At the end of the day, the GWP is brilliant, I think because people like the idea of getting something for free (for a second, let's take the simple approach and believe that there's such a thing as "free"). As long as the practice is based on research, you pretty much can't lose with the GWP. Me, I'm just a sucker for travel sizes of things like mascara because packing for a trip and dumping all your "full-sized" stuff into your bag isn't as much fun (and if you are going to have an allergic reaction to a product you have never tried before, you may as well do it on vacation). And also, one time I did find my "perfect shade" of lipstick in a GWP. I'm just hoping that there's a reader out there that has had some exposure to the strategies behind the GWP that can help to satisfy my curiosity.  I need to know! I just think that GWPs can leave a customer feeling so good about their purchase, get additional product into their hands and impact their selection decision when they are faced with many options. Great marketing tool. Man, I miss homegrocer.com. Come back Peach Guy!

And also to see if someone can tell me of a situation outside the cosmetics industry where this practice has been applied effectively (and what kind of research was behind it). My guess is that it would have to be a high-touch sales situation. Any thoughts?

And since I am asking questions, I'm wondering if one of you can tell me what it is that makes the lobby of the Westin Times Square smell so good (yes..."good!"), if all Westin's smell like that and where I can get some. I know there's one reader out there that has the answer (you know who you are).

Comments (22)

  1. While not exactly related…I have seen the recruitment marketing strategy: "free $50 gift card if you come in for an interview" work very well in high need nurse recruiting.  GWI (gift with interview?).

  2. Vicki says:

    Ok… here’s to date myself… waaaay back in the EARLY 1990’s, I was a Lancome representative for a posh department store in upstate New York.

    I had to go through the training – and had the official Lancome smock and official binder with all my little certificates that proved to the world that I could wear makeup and tell you how to look good too! (Yes, this is all pre-college – let me relive my moments of ignorance!)

    Anyway…. from my limited recollection, the products selected for the GWP program were those that were new and mixed in with the ol’ tried ‘n trues — basically, you are handing out freebies that the cosmetics industry will test market their popularity AND you’ll get some samples of the products they know are already getting a good market share profit (therefore, they will likely get a repeat customer with the good expensive stuff).

    The lucky girls at the counter already receive LOTS of the freebies beforehand as well- many times, these are exact same items that customers get as the GWP.

    The employees (ahem… REPRESENTATIVES or ASSOCIATES) are also survey takers – each time I received a package of the  newest line, I was expected to wear it (since customers always ask, "What’s that lipstick YOU’RE WEARING?" -you know, to make you just a tad self concious!). We also submitted our survey results back to the company via USPS (remember: it is the 90’s and there was no internet on online submission of survey results for market research… someone at Lancome was sitting there doing the data entry on Lotus).

    How did they select colors and shades and all that? That was predetermined by the runways in Paris, Milan, New York, etc…. or at least, this is what they told me at some certificate-earning seminar.

    It is too close to midnight for me to think of anything intelligble to respond to – and as far as the scent at the Westin… I wouldn’t know….

    New York City is one of my favorite places on the planet…! If I didn’t have cars, cats, kids, a dog and a husband, I’d probably call the Big Apple home.

  3. I read about how trademark scents are being used a while back. A quick search reveals that Westin’s is called White Tea. And yes, you can buy it. I don’t know if they’ve rolled it out  to all locations yet.



    I wonder if Westin pays attention to blog mentions? Someone there should be able to answer the rollout question.

  4. Regina Miller from the HR’s Brand New Experience Blog wrote about this here – http://blogs.bnet.com/hr/?p=343 – with several links to different stories on the Westin and Hotel smells topic.

    She wrote: "Smell  makes a difference to me as a consumer…during a recent visit to the Marriott Marquis in NY I stepped into one of their new high speed elevators and it smelled awesome.  What do I think of my experience in the elevator – fast and great smelling elevators.  

    Interesting how hotels are choosing to differentiate.  I am curious on how these intangibles impact customer loyalty and retention."

  5. HeatherLeigh says:

    Shannon-that is such an interesting tactic. I guess you have to be careful in terms of what it says about the company and interview (shuold be used by companies that are having trouble getting people to the interview but less trouble closing them once they do interview). Probably not a big company tactic but I love that people are using it…especially if it works.

    Vicki- I knew someone would have the scoop on that! I could not get over my curiosity. I was thinking that they shuld ask the customer to fill out a survey to get the GWP. Thanks for the info!

    Graham and Nathan-thanks for the info. I am so going to get some of that scent! I just love it and it is indeed very calming. One of my blog readers works for Starwood hotels. He/she doesn’t need to say who they are (I realize that some folks prefer some anonymity and I don’t blame them). I’ll let you all know if I see any evidence that they are tracking blog mentions. If they read this, all I can say is keep it up with the lovely smell! (from an admitted sniffer…what can I say?)

  6. Wine-Oh says:

    HAHA! (thats for your last question).

  7. Things you might discover when you monitor social media: A happy customer who likes your product. An unhappy customer who doesn’t. All the more difficult if your company name ends in "ell." Is this a PR problem or a customer…

  8. HeatherLeigh says:

    Nathan (the Net-Saavy Executive) makes some good points in his post (via trackback above). Someone should come up with a simple guide including boollean advice for companies that want to monitor social media relative to their brands, products, etc. Maybe someone has already done this.

    I love talking about products/services that I really like. And I think it’s awesome when those companies contact me about their products/services. It’s amazing how much time I spend talking about cool products. I just had lunch with Tod Hilton (of http://www.dirtydogstink.com) and told him about my Roomba, then he told me about his Keurig coffee maker (as he considers whether to get a Roomba, I decided to invest in some new pods for my Senseo rather than buy a new Keurig coffee maker…I was this close to actually considering it though…maybe someday when I can rationalize owning 4 coffee makers).

    I got into a conversation with someone last week about how it engenders loyalty when a company receives my feedback thoughtfully (and thanks me for it…I’m not sharing it to be mean). Few companies consider that most feedback is given because customers want to be heard and feel part of the product development process, or they want to be heard because something horrible happened to them and they are going to tell their ten friends about it whether you bend over backward to address it or not. They are going to tell the story and you can choose what the story is. If the feedback is received defensively (whether it’s feedback on a bad experience or a feature wish list), the story isn’t going to be good. I have more to blog on that…part of my New York travels.

  9. Tim says:

    Funny, my wife and her sister both got a GWP from their mother one year at Christmas.

    Her sister: "Thanks for the gift with purchase, mom!"

    Her Mom: "What?"

    Her sister: "You know, you buy some cosmetics and they give you a free gift?"

    It was one of those wonderfully uncomfortable holiday moments everyone always looks forward to.

  10. Ben R Alonso says:

    New York is the greatest place in the world. I think being in New York awakens the senses. There’s so much going on at the same time all the time.

    My wife uses Clinique products. They have lots of GWP sales. What I have noticed is that many of the GWP products they offer are everyday use type of product (the lipstick, facial cleansers, etc).

    They probably make a good profit on their beauty products. However, if they get their customer base to use the lipstick, face wash, and other daily use products… their profits would probably grow even more. Plus they get a lot more traffic with these promotions.

  11. HeatherLeigh says:

    Tim-that is awesome! My mom and I have traded GWP products but never as a "gift".  I bet the mother was surprised that they were on to her. I guess it’s the thought that counts….wait, is the thought "I love you only enough to give you something I got for free" or "I don’t think you are smart enough to know I got this for free"? Maybe it’s not the thought that counts : )

    Ben-that is exactly why I returned from my trip completely exhausted! It was fantastic! Clinique hooked me with the Berry Freeze lipstick so I know of which you speak! I can’t use their skin products anymore since my skin has, ahem, aged a bit. : )

  12. There are some guides for reputation monitoring out there. There are also a bunch of companies offering variations on outsourced monitoring services (ranging from one person with a feed reader to multi-million-dollar software and service packages). Helping companies get it figured it out is part of the business I’m working on. We’re seeing more mainstream attention to the need to follow the online conversation, but I don’t think the knowledge of how to do it is approaching mainstream yet.

  13. HeatherLeigh says:

    Nathan-sounds like a promising business!

  14. J.J. says:

    Heather, I am not in cosmetic industry but just want to offer my two cents here. I think how the product is promoted or tested is related to product, distribution, usage and customers.  Cosmetic as a consumer product sold at retail, so point of sale promotion is effective and high margin makes this model sustainable (: compared to low price, fast-moving grocery products). In addition, cosmetic can be easily given to friends and families as Nice presents even when one doesn’t know whom they’d give to (: vs clothes which have to be tried therefore can’t purchase unless one is sure of size and style etc.), in a sense, it is relatively low involvement. Also, word of mouth, especially, word of women’s mouth is Powerful. You know, Women talk and they like to share their experiences and recommend beauty products to people they know. They also do so by buying free products for their friends. Who would not want a leopard print Lancome cosmetic bag filled with cute mini-travel size lotion, cream, eye shadow, mascara and lipstick?

    Another perspective is when a model is proved effective, competition copies it. So it spreads to the whole industry. On the other hand, when something is not tested in a industry, marketers are skeptical about the outcome. Basically, most people are followers and lack original ideas.

    It is good to hear Vicki used to be a Lancome representative. I am a big Lancome fan. Lancome and SK II are my favorite.  Lancome shimmering poudre applied on top of foundation powder can make your skin look like the models in Vogue – a beauty tip for Heather and all the girls here 🙂


  15. J.J. says:

    About the scent, I read somewhere that two theaters in Japan have seats/chairs release scent in accordance with movie scenes. One specific movie mentioned is the epic New World, starring Colin Farrell and the beautiful 15-year-old actress Q’Orianka Kilcher as Pocahontas. I wish I had watched New World with scents. It would have had definitely improved my experience even more.

    Indeed brilliant. Humanbeings respond to smell, as much as to music if not more, physically and emotionally. I mean, people associate music or tones with their experiences, period of life, romance or hardship etc. When I visit places from childhood, I instantly recognize the smell and sentiment related to it. Before we start to eat, the smell of food can stimulate our tongue. And certain smell can relax people or even mesmerise…


  16. Paul says:

    You ask why the practice of GWP has limited application.  It has to do with demographics and psychographics.  Basically, it doesn’t work on everyone.

    For instance, I could care less about a GWP.  My preference would be that the seller reduced the price by the amount of the "gift". If it is something I would have purchased anyway, of course I’ll take it, but it doesn’t engender loyalty, or motivate me to make the purchase or to spend more or to buy again.  Therefore, a GWP would be a total waste as a marketing tactic for someone like me.

    I believe you see a lot more of this with products sold only to women, and generally (although I hate to generalize) women are more receptive (susceptible) to this tactic.

    On the other hand, I am very receptive to good smells. I love going into stores at Christmas with all the great food smells, and cinnamon especially, wafting through the air.  Smells have the ability to change your mood even faster than music I think, and most people aren’t even aware that it’s being done to them.  Very subversive (or is it subliminal?).

  17. David Armano is a Creative Director at Digitas, where clients presumably pay the big bucks for his creative ideas for business. Today on his blog, he offers a free sample for hospitals, based on his experience getting an MRI. David…

  18. randomguymike says:

    Well, I know this is an older topic, but I’ve found this blog as part of my MS pre-interview research prep and will likely feel compelled to make comments on certain old topics as I go through.

    The GWP is used a lot, in practice. All BOGO offers are really GWP’s, you just get another of what you bought for free. Working in the food/restaurant area I see these all the time too. A great example is the Free Brownies from Domino’s wih purchase or Free Breadsticks with the order of a pizza at menu price with Papa Johns.

    Also, in sports marketing this is huge. Go to a Detroit Tigers game, and you can get a Carlos Guillen Bobbleead for free when you buy a ticket. You’d be surprised how many people will be drawn to the event based on the crazy trinket they give away.

    Anyway, great blog and I apologize for commenting on old topics, but it provides nice break form learning about every obscure fact and tidbit I can dig up about Microsoft in the next 50 hours and 8 minutes.

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