The only place where success comes before work is in the dictionary. So said Vidal Sassoon in a BBC radio interview some years ago. The inventor of modern hairdressing – who gave us the “five-point cut” and the Nancy Kwan bob and revolutionised hair and fashion in the Sixties – and his name and brand continue to thrive because his business has continued to evolve.
Field marketers can possibly afford to pamper themselves with expensive hairdos judging by the sector’s dramatic growth. The Direct Marketing Association Census claims the industry was worth £487m in 2001, having expanded by almost 40 per cent in a year, before it experienced a more sedate 2002.
What began as a discipline handling merchandising and simple sampling, has expanded into areas such as data collection, experiential marketing, outsourced salesforces and monitoring compliance levels of point-of-purchase (PoP) and promotional material.
Field marketing (FM) and hairdressing are two thriving industries: they offer clients something individual, creative and experimental. But, as the world’s most famous barber points out, past success is no guarantee of future growth and every company must be prepared to work as hard in the future as it has ever done before.
Indeed, the challenges facing the industry mean it cannot afford to rest on its laurels. Clients may be spending more on the discipline, but brand managers are demanding a visible return on investment (ROI) and all agencies are under pressure to discover new markets and to focus on the most profitable areas of their business.
Recent UK and EU employment legislation on part-time workers has added about ten per cent to employment costs. Meanwhile, there is a growing trend towards securing commission-only agreements and risk-share deals – where field marketers are rewarded or penalised financially if they exceed or fail to meet targets. There are fears that if additional staff costs are passed on, clients will be dissuaded from outsourcing their sales activities.
“There was a time when FM was seen as the most cost-effective option for businesses because they could outsource staff, but we could see internal salesforces being expanded. Real risk-share deals are workable, although we avoid commission-only agreements as the rewards don’t justify the risks,” says Headcount managing director Mike Garnham.
Headcount is researching a number of areas for possible expansion. For instance, it has approached rail companies with an idea to provide them with on-train ticketsellers, who could eventually promote other products and services while on board.
Gekko Partners director Dan Todaro says agencies need a greater in-depth knowledge of clients’ markets to make FM budgets work more effectively.
“Everyone must adapt to remain profitable while still offering the service clients expect. Clients have always looked closely at their ROI from FM, but are doing it even more intently now,” he says.
Field marketers appear pleased that clients want them to be more accountable as this means the discipline is no longer seen as a quick-fix solution to delivering a short-term sales boost. Agencies are invited to more below-the-line campaign meetings at an early stage to give views on which stores should be targeted and what PoP support is needed.
Ellert Field Marketing director Bruce Ellison says agencies need to identify their strengths and target areas that could offer lucrative profit opport
unities over the long term. “We have identified the small to medium-sized enterprise (SME) and business-to-business salesforce sectors as two areas where there is potential, because both require a high-value service; and larger FM companies like ours have the infrastructure to provide it,” he says.
Ellert already manages targeted B2B campaigns for leading car companies Fiat, Toyota and Volvo. “SME and B2B sectors offer us a better future than experiential marketing, where there are no barriers to entry. So many companies are entering and competing on price that profitability is being eroded,” he adds.
One of the best-known, dedicated experiential FM agencies is The Works, which is retained by Coca-Cola. Creative director Josh Robinson accepts that margins are coming under pressure as more players compete for tighter budgets.
“Clients need us to be accountable: brand managers worry about the lack of control they have over live events. We have to show them there is a scientific method behind what may seem like in-store chaos at times,” he says.
The popularity of experiential marketing has been a major factor in persuading clients to increase FM budgets. As crowded as the experiential end of the market has become, there are those who believe the FM specialists are failing to maximise the return for clients from live events.
FM is often championed as one discipline where results can be measured effectively. This, and the industry’s continuing investment in new technology, should benefit agencies during what could be another difficult year. The technology, says PMI director Gail Tunesi, “enables clients to react to data immediately, while promotional and sales activity is still in store, rather than simply being something useful to discuss at a marketing meeting a couple of weeks later.”
Market leader CPM UK’s managing director Mike Hughes expects FM to become more sales-driven because clients know any activity can be measured accurately. He believes there is potential in direct selling and CPM is chasing business in a number of sectors, although he is reluctant to reveal any details.
“Our industry has shown that it can achieve high volumes. There are certainly sectors where our skills have not been used before. We hit our profit plan last year and I am reasonably confident about our prospects for 2003,” he says.
As the industry evolves agencies may choose to specialise as they identify their particular strengths. MHP client services director Lynette Baer thinks there will be a split in the industry, because the delivery and skill-sets required for traditional activities, such as merchandising, compared with experiential marketing are so different.
Last November, Aspen Field Marketing changed its name to DVC Sales as part of its corporate strategy to realign itself within the DVC Worldwide portfolio. Managing director Gary MacManus accepts the decision to drop the term FM was a brave and dramatic move.
“The phrase field marketing has become so broad it is meaningless. Our clients understood the reasons for the name change, although we have still been trading on the Aspen heritage. Having sales at the centre of what we do is already opening new doors and we are getting more involved in profitable areas,” he says.
For traditional field marketers monitoring PoP and promotional compliance, particularly in grocery multiples, should continue to be a big earner over the next few years.
It is not just in store where agencies are increasingly finding that their skills are needed. Sure Field Marketing expects to increase its activity throughout the supply chain and is working with a number of clients to ensure stock problems are dealt with quickly and efficiently.
The demand for FM is likely to grow, but clients are expecting more for their money. Those agencies that remain innovative while focusing on their traditional strengths will benefit the most.