Sales promotion is a key sales driver, but in today's competitive market, it is increasingly required to also do a branding job. With marketers keen to constantly reinforce brand values, promotional communications are frequently called upon to boost awareness.
As Graham Greene, Meerkat chairman, notes: "In the past, SP was about shifting boxes and nobody cared too much about the effect activity had on the brand. You cannot separate the two any more. Promotions should enhance and support a brand."
Many techniques, from DM to sponsorship, can raise awareness but, according to the Institute of Sales Promotion diploma, prize promotions and self-liquidating pushes are among the most effective. This guide can only give a brief overview of how these techniques work, but will provide a useful starting point for planning activity.
Prize promotions aren't simply about enticing prospective consumers with a juicy incentive such as a cash prize or consumer durable. Cleverly thought out, the technique can reflect brand values. Earlier this year, Meerkat ran a £2 million scratchcard cash giveaway for Dulux's trade business.
Greene says the prize fund supported Dulux's position as the biggest brand in the sector.
There are several basic prize promotions, each with its own particular uses. But prize promotions are subject to legal restrictions and it's sensible to check that activity adheres to the guidelines of the British Code of Advertising, Sales Promotion and Direct Marketing.
Promoters can't run pushes where the chance to win a prize is linked to the purchase of product - these are classed as illegal lotteries. As a result, promoters favour competitions where consumers are required to use some form of skill or judgement. This gets them involved with the brand and so raises awareness.
A case in point is postcard media firm Boomerang, which was facing a tough advertising market. Its agency, Swordfish, came up with a campaign designed to boost Boomerang's profile with the public and media schedulers.
Swordfish director Steve Richards says: "We came up with an old-fashioned competition mechanic. The push, called the Golden Boomerang, required participants to solve clues and locate the prize. We ended up with 150,000 players and huge media interest."
It's worth noting that competitions may appeal less to consumers looking for a more instant reward. Other main points to note include: competitions could require a handling element that has to be factored into the budget planning, and any judging must be fair and transparent.
This mechanic generally asks the consumer to submit their details for the chance to win a prize. You cannot require purchase, but prize draws may be used to achieve presence in-store. "The classic example is a 'Win this bike today' promotion," says Chris Bestley, education director at the ISP. "It gives you an opportunity to gain display as well as generating data, which may be useful."
Flexibility is a big strength. Competitions can be run off-pack on leaflets or through media partners to tight deadlines, which might be beyond on-pack activity. The downside is that it may not drive sales and today's consumers, used to more instant gratification, may not find it that appealing.
The instant win was dreamed up to help promoters get round existing laws that preclude illegal lotteries.
The free entry route allows promoters to offer instant prizes as no purchase is necessary to enter the promotion.
Mike Pragnell, group account director at Fotorama, says: "Although you are not required to purchase, most people do. However, not all prizes may be claimed so you are often able to offer a larger headline-grabbing prize."
Because of the free entry route, clients will have to arrange a handling house to deal with mail, email or SMS entries. The technique remains one of the most popular with promoters and consumers because of its immediate rewards. But there has been some concern that its ubiquity could reduce its effectiveness.
Self- liquidating promotions
Promoters can make their budgets go further by getting consumers to fund activity, otherwise known as self-liquidating promotions (SLP). Typically, consumers send proof of purchase and a cash sum towards the cost of an item. An offer can be described as "free" even if the consumer is required to pay full postage and packing.
Pragnell says an imaginative premium can perform a valuable branding job.
Although SLPs should present no risk, in reality they can backfire if the offer under- or over-redeems and there are stock issues. For this reason many promoters opt for fixed fee insurance cover, says Pragnell.
But it can be difficult to guess what will do well and SLPs are another technique that fail to excite those who want instant rewards. "In some ways, the SLP is the weakest form of sales promotion," says Bestley. "They cost the least but unless you have something like the Andrex puppy, they also achieve the least in comparison to prize promotions."