The latest Bellwether Report, 19th January 2012, reveals an 11 year low in confidence of
-44.9%, executives assessment of their own company's prospects had deteriorated for the first time since the beginning of 2009 and the recent trend of increasing marketing budgets is running out of steam, dropping from 3.4% to 0.6%. All pretty gloomy.
More worryingly, for our industry at least, is the fact that 'Below the Line' and Main Media spend were the only marketing sectors to see a reduction in spend losing out to Discounting and Online strategies, particular pay per click or 'search' marketing. To my mind the winners here strike me as either quick fixes or, in the case of discounting, a rocky road to fuelling consumer expectations for lower prices and long-term margin erosion.
Why is sales promotion missing out?
If we ignore for the moment the fact that discounting is a form of sales promotion, why is the more creative end of sales promotion faring less well? Compared with the other disciplines, Sales Promotion stands up well to the competition*:
| Comparing Marketing Disciplines | |||||||
|---|---|---|---|---|---|---|---|
| Category | Easy to Set up |
Economical | Quick to Launch |
Reach a big Audience |
Visible at Point of Purchase |
Targeted | Measurable |
| Advertising | ✔ | ✔ | |||||
| Direct Marketing | ✔ | ✔ | ✔ | ||||
| Sales Promotion | ✔ | ✔ | ✔ | ✔ | ✔ | ||
| Search Marketing |
✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| Social Media Marketing | ✔ | ✔ | ✔ | ||||
On this assessment sales promotion is second only to search marketing in terms of ticking all the boxes, but let's face facts: search marketing can only drive traffic to your site and not much else; it doesn't add value, develop your brand personality or capture consumer data; it's no real use for grocery and drinks brands which don't sell directly off their website and if competition for pay per click spaces gets too fierce you'll either end up paying over the odds or only seeing traffic for very narrow search terms.
We suspect, the reason that marketers are shirking sales promotion comes down to:
- Perceived cost of setting up a promotion (it needn't be - see below)
- Fear of failure. It's so much easier to run a discount promotion and see immediate results, but beware - it's a slippery slope. Or maybe you've had a bad experience before? If so, work with a reputable IPM Award Winner for complete peace of mind.
- Lack of Knowledge. It's hard to feel comfortable working with something you don't fully understand. Sales promotion is not one of the dark arts and a good agency / supplier should be able to demystify anything that isn't obvious. Equally plenty of brands feel more comfortable with running Social Media Campaigns because we're all familiar with the platforms. However that doesn't make you an expert and it's very easy to get this very wrong. Familiarity does not always equate to understanding.
Cost effective sales promotion solutions
Okay if you're still reading you must be slightly tempted and you want to see what's possible for a modest budget before seeking out that reputable supplier? Well here's some for starters...
- Work with a single complimentary brand partner offering an appealing discount offer or prize (Tip: maximise the relationship by providing samples of your brand in their outlets or co-branding menus, running a treasure hunt etc)
- Run a tried and tested off-the-shelf discount programme as a gift with purchase
- Liaise with a Movie / Music / Book publisher on a contra basis to promote a forthcoming release, offer exclusive prizes etc. (Tip: try and secure a discount off the wider release or catalogue stock as an everyone's a winner element)
- Use Facebook / Twitter as a platform to run a simple member get member reward or loyalty scheme. Use a combination of discounts on your own product or service as entry level rewards and consider complimentary third parties, premiums or experience providers for higher tiers
- Taste Guarantee - e.g. if you don't agree with the statement, write in with 15 words or more to say why and get your money back. Surprisingly economical and a very powerful tool for establishing brand quality in the eye of the consumer (Tip: more beneficial to newer brands or relaunches)
* We've taken a general view of typical activity in each case and, before any of you start, I'm sure there are exceptions to every rule and you could argue the relative merits of every discipline for each of the criteria. Arguing against our own gradings for sales promotion - it can be relatively easy to set up and quick to launch but we were basing our rating on the fact that most FMCG sales promotions often require sell-in and subsequent buy-in from the retailers that carry the promotion. This is rarely a quick process.
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