Trade promotions have long been the poor relations in product marketing. Manufacturers and marketers which take the time to build good relationships with retail trade contacts may at first find the task demanding, but many discover it has a significant impact on sales.
It is important to treat trade customers as individuals, says Catherine Shuttleworth, director of The Marketing Store Worldwide. “I find a lot of manufacturers treat all their trade customers in the same way. But in retail you need to have account-specific solutions.
“It’s no longer any good taking everyone on a plane to Paris, or to a football match, and hoping this will get the product listed. The product and marketing support have to be right, and you’ve got to be prepared to work in partnership with the trade.”
The best tactic is to maintain regular contact with trade customers, says CPM director Mike Hughes. “Every month, we call on hundreds of thousands of retailers on behalf of our clients. We also do a lot of trade customer management by telemarketing, and on the Web,” he says.
“One retailer may like a monthly face-to-face visit, while another may want to be telephoned weekly and visited once a quarter, but receive some sort of mail-shot in the meantime. Through a combination of techniques, you can develop an appropriate contact strategy.”
An important aspect of this contact regime is topicality, says Hughes. “It is important to have something of interest and relevance to say to the individual on a regular basis – something that is going to help their business. It’s not just about product sales; it could mean providing information on how best to merchandise a product or forthcoming product launches.”
Relevance to the target market determines how successful a promotion will be. Virgin Vouchers, which supplies vouchers for third-party incentive schemes, recently linked up with car rental company Hertz to promote its new “One price one deal” offer to travel agents. Agents earned vouchers for each booking they made for the promotion and there was a weekly prize draw, supported by an advertising campaign in the travel trade press.
Hertz Europe vice-president for sales, marketing and leisure services Bill Jones says Virgin Vouchers were chosen because of their likely appeal to the target audience. “Virgin is strongly associated with leisure and this promotion focuses on leisure car rental. The individuals we are targeting in the trade promotion are, on the whole, young people who enjoy their leisure time,” he says.
The person on the shop floor makes the difference between the product being on the shelf or in the shopping basket, says Platform managing director Graham Temple. “In retail environments, because of the high staff turnover, it is difficult to justify spending a lot of money training somebody across an enormous product selection. The average person is unlikely to be given training beyond: ‘Here’s your overall and there’s the toilet’.
“In addition, people who have worked on the shop floor for a while tend to recommend brand ‘A’ and aren’t receptive to new products.”
Platform examined how clients approach trade promotions and concluded opportunities to make an impression on trade staff are being wasted. A promotion for Robert Bosch addressed this problem, says Temple.
“We sent the retail outlet an expensive-looking aluminium briefcase containing a develop ment programme. We asked it to nominate one member of staff as the ‘champion’ or ‘expert’. They went on a one-day intensive training course and then co-ordinated a distance learning programme for other staff. Those who passed were given awards, such as the Certificate of Bosch Excellence.
“We also gave out business cards to shop floor staff. These people are usually ignored by manufacturers and all this acknowledgement had a profound effect on them.”
In-store demonstrations linked to competitions can be highly-effective in promoting a service to the trade, says EMS Chiara director Daniel Todaro. “We recently relaunched the CD Walkman, which is now ‘joggable’. On the shop floor, our mission was to show the product to everyone.
People listened through headphones while our demonstrator jumped up and down around the floor to prove it worked. We focused on five key features, based on identifiable sales pitches we knew consumers would like. We got the stores to complete a training session and let them compete to win a prize – the article on which they’d just been trained.”
For Sue Sherring, account director at the Promotional Campaigns Group, the key to a successful trade promotion is to ensure that prizes are accessible to all. “A sales incentive we did for European Telecom allowed our dealer customers, dealer sales staff and European Telecom sales staff to earn points towards a skiing weekend in Chamonix. The points were on three different phones, but we included random bonus phones with higher points to allow small dealers to earn enough to win a trip.”
It is vital to make an effort to promote new products to the trade, says Logobrand marketing director Alison White. “Newly-launched products need to maximise sales within the first 12 weeks if retailers are not to question the listing. It is crucial that trade outlets are monitored and guided from the very beginning so that the manufacturer and retailer benefit from maximum sales.”
White believes that if trained representatives of product manufacturers visit retailers, problems can be prevented from turning into crises. “When Van Den Bergh Foods launched ethnic varieties of Chicken Tonight Sizzle & Stir, our field personnel found that stores were merchandising the new lines in the same position as the Chicken Tonight fixture. Launch tests for the product had shown sales would be higher if it was merchandised from the Indian and oriental fixtures.
“Logobrand representatives liaised with retailers to explain the need to reposition the product. They also offered to re-merchandise the items so that they were in the correct locations. The result was greatly-improved sales.”
Nick Cunningham, director of Dynamo, which runs trade promotions for a number of clients, says: “It’s not just about tactical volume uplift and increasing short-term sales. Quite a lot of the time, we focus on instilling correct selling disciplines and using trade activity to take a category management stance with the customer.
“If you’re doing a big initiative and are the key supplier partner, you focus on the bigger areas which the client is concerned about and only slot in tactical promotions when they’re relevant.”
Shuttleworth says the trick is to build a relationship with more than one person: “The important thing, especially with the big retailers, is to build relationships at every level.
“It’s like courting someone and keeping them. If you understand the retail brand well enough, you will take time out to do more than pay lip-service and go into the stores every week and become their customer.”
EMS Chiara sends its Sony dealer support advisers on store visits. “They build a relationship with key individuals on the shop floor,” says Todaro.
“They visit every four weeks, meet and greet the same individuals, and they’re in touch with new staff. Our advisers are all branded as Sony advisers, with Sony business cards.”
Hughes says CPM is acutely aware of the need to develop relationships: “You’ve got to give the retailer an incentive to list, or continue to list, your products.
“But it’s best to avoid having sales that go up when you’ve got your promotion on and drop off when you haven’t. Promotions cost money. Long-term sales benefit from long-term relationships.”
In retail, every manufacturer wants a strong relationship with the trade. But dealers can receive too many overtures for comfort.
Todaro says professionalism is the best defence against this: “The way we differentiate ourselves is that our staff always greet the store manager and ensure they have permission to be in the store. We also identify our staff’s key traits and train people in procedures they must follow. We recently completed a series of training courses with our office and field staff to teach communication skills and enable them to expand on their repertoire.”
Sherring admits her work with European Telecom poses a challenge because, to busy dealers, hers is just one voice among many. “Mobile phone dealers get offered so many different incentives and may be tempted to push the one they are most interested in. We have to offer them different incentives that will keep them selling our range of phones. We did some telephone research which showed our target audience wants a large number of attractive prizes. That is why we put in random phones. We didn’t want the small dealers to think they had no chance of winning.”
When asked what ensures long-term relationships with the trade, Hughes is emphatic: “The material must work in the mutual interest of the trading partner and client organisation. I’ve seen examples where organisations have been very focused on what they want to achieve, at the expense of retailers, and it doesn’t work over time.”