The Big Picture

Too much Saks Appeal? What to do when a promotion over-redeems!

A recent Free Hair Cut or Taster Facial treatment with Saks Hair & Beauty offered in the News of the World severely over-redeemed leaving many dissatisfied customers for both parties. Not the desired result, I'm sure. Obviously, when you find yourself in this undesirable situation, what do you do when a promotion proves too popular?

Well the old adage, prevention is better than cure is especially true of sales promotion offers. Obviously a Free Hair Cut with Saks, worth £35, just for buying a £1 newspaper is a very attractive offer; perhaps even more so in these stricken times. Lets do the math: If we assume that The News of the World sells around 3.5 million and it pulls only a conservative 0.5% across the 80 participating salons, that would be 218 redemptions per salon or, put another way, more than 50 per week or over 8 per day. These days newspapers tell a number of websites about forthcoming promotions to bump their circulation, so we suspect that the redemption rates are more likely to be 1-2% or higher. In which case the salons would be swamped. 

This simple exercise would have demonstrated that the promotion was not sustainable and you would either need to:

1. Increase the number of venues - obviously not possible with one brand partner
2. Put additional barriers to entry in place, e.g. buy more papers to qualify

If it's too late for such smug hindsight, you're obviously facing a public relations disaster if the situation is mishandled. Again, proper planning would ensure that all of the participating venues actually know about the promotion. (It would only add insult to injury if the venue denies all knowledge of the promotion.)

These are our suggested measures to minimise the damage, and perhaps even win over hearts and minds:

• Data capture the details of all complainants. You need to be able to maintain the dialogue with them throughout and your pro-activeness will be much appreciated. You only need a few happy customers to add their voice to twitter, facebook and forums to help turn down the heat of protest.
• Inform customers that might be suffering in silence: acknowledge that the promotion has over-redeemed through the appropriate channels. You might not want to draw too much attention to this, but you may not have any choice. It can always be a discreet flash on your homepage.  
• Extend the validity period to accommodate voucher holders who couldn't book.
• Alternatively look at a different value-added offer from the current partner, or even consider a new hero partner to save the day if relations have broken down irreparably.
• Recruit more venues to increase capacity - a brand partner might object to this, but this is fine for independent businesses.
• Communicate all these strategies with your existing venues so they are 100% briefed and ensure that they relate this to ALL staff. Ignorant staff will only infuriate customers further.

Mosaic Marketing has put together a number of FREE MINI TREATMENT & 2 for 1 Beauty Promotions for major clients providing at least 500 venues to cope with the demand. If you want to pamper your customers, why not give them a shout? 

Is discounting Vs adding-value more costly in the long run?

According to a recent survey conducted by YouGov asking consumers how their behaviour has changed during the recession, 55% said that they are looking for discounts or extra free promotions. A respectable 24% said that they were more likely to look for added value promotions, like Walker's Gary's Great Trips or Becks - Do Something Different.

Naturally consumer sentiment dictates marketeers behaviour. You only have to look at the shopping aisles to see the proliferation of discount deals on offer. Whilst this might achieve short term sales uplift, and appeal to the discount hungry consumer, what are the long term effects of this strategy?

The most obvious concern is that consumers' perception of a brand is detached from the real value and benefit a product offers. It becomes a mere commodity that you buy at the lowest price with no regard to quality, provenance or features. 

Surely if everyone is offering a discount, where is the point of difference? If this phenomenon perpetuates, the consumer will start to view sales promotions in the same way as excessive advertising: noise to be ignored, a turn off, an intrusion you could do without. 

WHEN we emerge from this recession, how easy will it be for brands to retain market share without continuing to discount? The danger is that consumers may come to expect price promotions permanently! A slippery slope - remember Pizzaland in the 90s? No, nor does anyone else.

The braver, long term approach would be to try and protect your value, preserve margins and work harder to engage consumers with strong promotional ideas that enhance not detract VALUE. 

It is debatable whether advertising will ever return to it's former glory as the drive to find better and better deals is shifting consumer spending online; an environment where sales promotion can thrive. Inspiring sales promotions that add rather than subtract value, should now take their rightful place on centre stage of a marketing campaign.