In simple terms, a trade in, trade up promotion means ‘out with the old and in with the new’.

A successful campaign of this kind can motivate a consumer to exchange an old product for a newer model, in return for a discount.

A customer’s incentive to buy is often linked with perceived value and so, to target a consumer successfully, the job of a marketer is to enhance perceived value, clearly advertising the incentive to buy.

A campaign of this kind has a number of benefits. Firstly, it could entice ‘brand loyal’ customers of a competitor to sample a product that they previously wouldn’t have considered.

How does it work?

A trade in promotion is a marketing tactic that encourages a customer to upgrade something they already own, in return for money off a newer model. The terms of the promotion can be adjusted to suit each client but, generally speaking, a customer must provide proof of sale, in exchange for a discount. To break it down, they can turn something they already have, into something they want.

The consumer feels as though they are getting extra value from a previous purchase and that there is a lesser financial sacrifice to obtain something they desire. The combined power of perceived value and the appeal of a new product results in a greater willingness to make a purchase.

How else could it benefit business?

A trade in, trade up promotion can be tactically managed to gain market share from competitors with unique promotion-specific criteria around the trade-in.

It can also build a stronger foundation with existing customers, concreting their loyalty, and expanding their life term through product upgrades.

It gives the customer a sense of value and enhances public image.

There’s also a great flexibility with a promotion of this kind, they can be run in different regions, to target a certain demographic and can encourage customers to trade in a specific brand, in a specific region.

Finally, it is a very effective means of capturing data, resulting in a greater sales potential.

The socially responsible consumer

It’s also worth noting that in today’s world, buyers are acutely aware of their own carbon footprint, their purchasing habits and how they might impact the environment and sustainability.

There is a greater emphasis on consumerism and how it relates to waste and climate change and a certain pressure to be a responsible buyer and to educate yourself about where something is coming from or going to.

To offer a trade in, trade up campaign allows a consumer to feed a selfish need for a commodity, whilst also off setting their guilt about needing or wanting it. If the item that is being traded in being re-used or recycled, they can rest easy knowing that their purchase has contributed in a positive way.