Trade marketing is an ever more important part of promotional marketing.
Without the buy-in of trade partners, most activity is dead in the water.
For this reason brands are keen to back up their consumer pushes with activity that incentivises and rewards the trade.
Vouchers have long been a vital part of this sector, and with good reason, according to Paul Hunter, business development director at High Street Vouchers. "They are the closest thing you can get to cash, but they are better value and less vulgar than giving money," he says. "Marketers are looking to influence the trade to sell their product on to the end user and they need to have powerful incentives."
Key to motivation
According to Graham Povey, managing director of Capital Incentives, brands in many markets have to find an edge, and third-party incentive campaigns can provide it. "You are trying to motivate people who are not your employees, but who you need to get behind your brand."
Povey says that such third-party campaigns account for about 60 per cent of Capital's workload, with sectors such as IT, automotive and telecoms being particularly lively.
Printer company Epson turned to Grass Roots Group, which operates the Bonusbonds voucher, for support in a competitive marketplace where Canon, Hewlett-Packard and Lexmark are active. The company had a finite budget but wanted to create as much impact as possible. Grass Roots devised an approach that offered Bonusbonds as part of a range of redemption options.
Rather than impose targets, the campaign offered a set number of reward points per sale, and these could be redeemed instantly.
Epson brand manager Iren Banfield said the aim was to keep things simple with a strong "sell this, get that" message. "Any targets we came up with could turn into a pushover or an impossibility, so we favour the simplest possible structure that rewards in strict proportion to sales. People will work out for themselves that it is in their interests to sell more Epson products."
Povey says that trade campaigns have to be more creative than staff incentives, because there is such fierce rivalry for the hearts and minds of channel partners. "You are in competition to get them to sell your products rather than somebody else's, so trade campaigns can have a large budget and be fairly innovative."
For a motor finance client, Capital came up with a campaign that used the budget in a more creative way. Rather than simply giving £25 in vouchers on every policy sold, Capital offered dealers a scratchcard that gave them the chance to gamble and win £1,000.
Choice is the important word. To be really successful, a trade campaign should not be too prescriptive in terms of the award it offers. Because trade campaigns are typically longer lasting than consumer equivalents, they have to inspire longer-lasting loyalty. Typically this has translated as a "points means prizes" approach with participants accumulating points as they hit their targets.
Communication of the campaign is vital to its success. A strong theme can make all the difference as vouchers in themselves may not excite the target market. Voucher consultant Bill Brown says: "Everything you want to use as a reward is available in voucher format. They have a unique ability to help you position your campaign however you want, and paint a picture of what is on offer."
Dressing up the voucher in a compelling manner is important. "If you tell somebody you are giving them a voucher then it might not excite them that much," admits High Street Vouchers' Hunter. "However, if you tell them that you are giving them the ultimate shopping voucher, then it's more exciting."
Ongoing communication is important, adds Hunter. "Often there is a great launch for a campaign and then it falls away. You have to keep reminding people how well they are doing and what they have to do in order to hit targets."
Vouchers are easy to distribute and get into the hands of recipients.
You are unlikely to have the logistical problems or returns you would have with physical items. Brown adds: "Cash is quickly forgotten or absorbed by regular spending. Vouchers do a better job of reminding the recipient of how they earned them and why they were rewarded, especially if you can brand the wrapping."
Companies that have wanted to push branding further have been disappointed that they cannot brand the actual vouchers. Suppliers respond that security issues and cost make this unfeasible.
However, the emergence of new products may offer fresh opportunities.
Plastic giftcards are a growing feature of the voucher market, and branding is possible. The Capital Card, a stored value Visa card that loads cash into an account for the recipient to spend however they like, is another option.
"The cards can be branded so that every time they are used there is a reminder of how they got it," says Capital's Povey. "Individuals are also given a monthly statement by email which can be part of the overall communication."
So, if money talks in trade, so, it seems, do vouchers.
TOP TEN TRADE TIPS
RICHARD KIRK, Chief executive, Projectlink
1. Define your objectives. Is your reward scheme a way of incentivising the trade to be more effective, to sell more product generally, or sell more of a particular brand?
2. Are vouchers an appropriate reward? They are increas-ingly the reward mechanic favoured by distributors as they are easily understood and straightforward to distribute and administer.
3. Identify the target market. Look at the age, lifestyle interests and pastimes of the potential recipients and match the rewards to them. Don't simply choose a multi-brand store voucher and let people sort it out themselves.
4. Choose a voucher provider that can support you in achieving the aims of your campaign.
5. Create a campaign that motivates the audience through a compelling story or theme and ensure that all elements of the communication programme are consistent.
6. Try to keep the programme as simple as possible. An over-elaborate programme will alienate participants and will lessen the programme's effectiveness.
7. Ensure all participants receive campaign literature.
8. Make an impact on launch day, whether it's through an event, a co-ordinated mail-out or advertising. Let people know what's happening.
9. Regularly update participants to ensure they are committed to the programme until its conclusion. Communicate success stories to the rest of the trade to maintain their interest.
10. Don't forget the debrief. What have you learned from the activity and can you make next year better?