Gift with Cart Value + Buy X Get Y (BXGY)
Learn how to Combine Gift with Cart Value and Buy X Get Y to boost AOV this BFCM
When it comes to running promotions, sometimes a single campaign isn’t enough to drive the kind of results you’re looking for.
By combining two complementary strategies, you can encourage larger purchases while giving customers even more reasons to hit “checkout.” One powerful combination to try? Gift with Cart Value and Buy X Get Y.
How the Combination Works
Let’s start by breaking down these two promotional types:
Gift with Cart Value: This promotion rewards customers with a free gift when their cart reaches a specific value. It’s a great way to encourage shoppers to add just a bit more to their order to unlock that special bonus.
Buy X Get Y: This offer gives customers an additional item for free (or at a discount) when they buy a specific product or a set number of products. Whether it’s “Buy 2, Get 1 Free” or a variation of that, this campaign drives customers to purchase more by offering them an attractive deal.
Now, imagine combining these two. Shoppers are not only motivated to reach a spending threshold to get their free gift, but they’re also excited to grab an extra product through the Buy X Get Y offer.
This combination encourages both higher cart values and specific product purchases.
Why It’s Effective
There’s a reason this combination works so well—it taps into multiple motivations at once:
Incentivizes Specific Purchases: BXGY focuses on driving sales of particular products by offering an additional item for free or at a discount. Customers are naturally drawn to offers where they feel like they’re getting more for their money.
Increases Cart Value: Gift with Cart Value encourages customers to keep adding to their cart until they reach the required spending threshold. When combined with BXGY, it pushes customers to aim for both the product-specific deal and the free gift, ultimately increasing the total cart value.
Enhanced Perceived Value: Customers feel like they’re getting double the rewards. They not only get the additional product from the BXGY offer but also a free gift when they hit the cart value, making the entire shopping experience feel more valuable and rewarding.
How to Calculate Profit When Using These Two Campaigns
When combining BXGY and Gift with Cart Value, it’s important to ensure that your promotions drive sales without significantly cutting into your profit margins. You need to account for the cost of the additional BXGY item, the cost of the free gift, and how much more customers are spending as a result of these promotions.
Here’s a formula to help calculate your profit:
Profit = (Revenue from BXGY purchases + Additional revenue from Gift with Cart Value) − (COGS of BXGY product + COGS of free gift)
Revenue from BXGY purchases: The total revenue from customers purchasing enough to qualify for the BXGY offer.
Additional revenue from Gift with Cart Value: The extra revenue generated from customers increasing their cart total to qualify for the free gift.
COGS of BXGY product: The cost of the additional item given in the BXGY offer.
COGS of free gift: The cost of the gift offered for hitting the cart value.
By balancing these factors, you can ensure that your promotion grows your business without eating into your profit margins.
Example in Action: Combining Gift with Cart Value + Buy X, Get Y
Let’s consider a store that sells home décor items, and the merchant wants to increase cart values while promoting specific products. They introduce two promotions:
Gift with Cart Value: “Spend $150 and receive a free candle.”
Buy X, Get Y (BXGY): “Buy 2 vases, get 1 free.”
The goal is to encourage customers to spend more on home décor items while promoting specific products like vases and increasing overall cart value.
Scenario 1: Without Promotion
A customer buys just 2 vases at $50 each, without any promotional offers.
Revenue: 2 vases × $50 each = $100
COGS (Cost of Goods Sold): Each vase costs $20 to produce: $20 × 2 = $40
Total COGS: $40
Profit: Profit = Revenue - COGS $100 - $40 = $60
In this case, the customer spends $100, and the store makes $60 profit. However, the customer hasn’t reached the $150 threshold for a free gift, and only two vases have been sold.
Scenario 2: With Promotion (Gift with Cart Value + Buy X, Get Y)
With both the Gift with Cart Value and Buy X, Get Y promotions active, the customer is encouraged to buy more to qualify for both the free gift and the BXGY offer. The customer adds 3 vases to their cart to qualify for the "Buy 2, Get 1 Free" offer and adds more items to reach the $150 threshold to receive the free candle.
Revenue before free items: 3 vases at $50 each = $150 Plus, a photo frame priced at $50 = $50 Total = $200
Free item (Buy X, Get Y): 1 vase is free as part of the "Buy 2, Get 1 Free" offer. Customer pays for 2 vases = $100 Plus the photo frame = $50 Total Revenue = $150
COGS of vases: 2 paid vases at $20 each = $40 1 free vase (COGS for the free vase) = $20
COGS of the free gift (candle): The free candle costs $8 to produce. COGS of gift = $8
Total COGS: $40 (paid vases) + $20 (free vase) + $8 (candle) = $68
Profit: Profit = Revenue - Total COGS $150 - $68 = $82
Understanding the Calculation
In Scenario 2, the combined promotions encourage the customer to purchase more items, reaching the higher cart value threshold and taking advantage of the Buy X, Get Y offer. Here’s what happens:
In Scenario 1, the customer spends $100 on 2 vases with a profit of $60.
In Scenario 2, the customer spends $150 after the promotions, with a profit of $82, despite receiving both a free vase and a free candle.
What Really Matters: AOV and Customer Behavior
Increased Average Order Value (AOV): In Scenario 2, the customer spends $150 instead of $100, significantly increasing the AOV and total revenue for the store.
More Inventory Moved: The customer is encouraged to buy more items due to the Buy X, Get Y promotion, which moves more vases and increases the total number of products sold.
Customer Perception: The customer feels like they are getting a great deal by receiving both a free vase (thanks to the BXGY promotion) and a free candle (due to hitting the $150 cart value). This increases customer satisfaction and can drive repeat purchases.
Revisiting the Example:
Scenario 1 (No Promotion): Profit = $60 AOV = $100
Scenario 2 (With Promotion): Profit = $82 AOV = $150
With the promotions, the store increases its profit from $60 to $82, an additional $22 profit, while moving more inventory and encouraging a higher total spend.
Why It's Still Beneficial:
Higher Cart Value: The customer is encouraged to spend more to reach the $150 threshold for the free gift, driving up the average order value.
Boosted Sales Volume: The Buy X, Get Y offer encourages customers to add more to their cart, increasing the total number of products sold in a single transaction.
Enhanced Customer Experience: The combination of a free product and a free gift makes the customer feel like they’re getting significant value for their purchase, improving their satisfaction and likelihood to return.
This combination of promotions is ideal for merchants looking to move more inventory, boost cart values, and enhance the overall shopping experience.
Best Products for This Combination
The best products for combining Gift with Cart Value and Buy X, Get Y (BXGY) are typically items that:
Encourage customers to buy multiples or sets: Products that naturally lead to buying more, such as matching items or consumables, work well with BXGY promotions.
Are frequently bought together: Customers often purchase complementary products in pairs or groups, increasing the likelihood of reaching cart value thresholds.
Have solid profit margins: This allows you to absorb the cost of the free item (in the BXGY offer) and the free gift (based on cart value) while still maintaining profitability.
Key to Success
The key to making this combination work lies in giving customers a compelling reason to reach that higher cart value.
Setting the cart value threshold carefully is crucial. You want it to be high enough to increase your average order value, but not so high that it feels out of reach for your customers.
By understanding your audience and aligning the cart value with their typical spending habits, you can ensure that they feel motivated to add those extra items to their cart, ultimately benefiting both them and your business.
Conclusion
Combining Gift with Cart Value and Buy X Get Y is a simple yet highly effective way to increase order size and keep customers engaged. The key is offering rewards that feel meaningful, motivating shoppers to add a little extra to their carts while enjoying the added value you provide.
So, if you’re looking for a way to drive more sales and create happy customers, give this combination a try in your next promotion. It’s a win-win for both your store and your shoppers.
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