Get payback from a giveaway

Free gift promotions are about a lot more than simply giving consumers something for nothing, a successful offer will reflect and reinforce a brand’s values and attract customers. By Richard West

Like repeats of old comedy shows and reality television programmes, there is something about free gifts and promotional offers that strikes a chord with the British. We just can’t get enough of them – which might explain why the UK, and England in particular, has the reputation as the “freebie” centre of Europe.

Britain’s continental neighbours often wonder at our “something-for-nothing” culture. Many European countries have tight rules in place that restrict the use of consumer promotions. However, in the less regulated, free market of the UK, we are following the American lead, where promotional gifts and vouchers are part of everyday life.

The Institute of Sales Promotion estimates that promotions are worth more than &£20bn a year – a figure that is, coincidently, close to the &£23bn that the Trades Union Congress (TUC) estimates to be the value of the unpaid overtime British employees work every year. Perhaps there is a connection and subconsciously we are claiming back what we believe our employers have taken from us in the first place. The fact is people just can’t help falling for giveaways – as the plethora of free CDs and DVDs given away by newspapers and magazines testifies.

But the phenomenon is not limited to the publishing sector. Consumer goods brands have long used sales promotions of this kind, so too have fast-food restaurants, retailers and home-entertainment providers. However, the days of the locked-in, brand-loyal shopper have all but passed, and increasingly fickle customers have high expectations when it comes to quality – irrespective of whether they are paying for it or receiving it as freebie. Brands therefore need to ensure that that the giveaway enhances the offering and doesn’t harm the brand by being shoddy, sub-standard or inappropriate.

Brand awareness

“Consumer promotions are not only about increasing sales but they also act as a critical part of the marketing strategy to develop brand awareness within a specific channel, while at the same time creating the right sort of environment to educate existing and potential customers about new products in the market,” says Andrew Cook, sales director with consumer promotions and incentives group, Unmissable.

Sales promotions exist as an incentive to make people change their behaviour. At a more tactical level, giveaway items can often create a short-term sales boost as well as adding additional value to the brand, but only if it complements it in a way that resonates with the target audience.

But like any well-planned promotion, knowledge is all important and understanding what will engage or enrage the customer is key. A few years ago, for example, an infamous promotion became front-page news after a video distributor posted caged, live snakes to retailers and video rental shops as part of the campaign to promote the video release of the film Raiders of the Lost Ark – clearly unaware that for many people, the sight of a serpent slithering out of a jiffy-bag was the stuff of nightmares.

EHS Brann managing director Alison Hamer believes that disasters such as these occur because the brand owners have failed to do their research properly. “Incentives should only be included if they add strength to the message, and act as a tool that not only initiates response but can strengthen any brand allegiance. Research into how customers perceive the brand and what they expect from the products can go a long way to achieving this level of customer insight,” she adds.

Purchase patterns

Looking at purchase patterns, for example, will provide a great deal of information about why customers are choosing to buy the brand – whether it is for convenience, luxury, taste or any other reason. The results, as Hamer explains, are not always obvious or predictable. “Some of our research for Linda McCartney foods showed that for many people they were popular for being frozen, not necessarily because they were vegetarian.

“When we analysed this information, we realised that the proposition was about freezer storage and convenience. The resulting free gift for Linda McCartney frozen foods was a freezer ice-scrape. It was an item which acknowledged that customers were buying the product partly because it was easy to store, but it also gave customers the means to de-ice the freezer to make more space for Linda McCartney products,” she says.

But not every brand owner has the time or the resources to research the market so thoroughly. Consumers are bombarded by competing marketing messages that are transmitted over a vast number of media channels. Business is getting increasingly cut throat and in some sectors, brand owners are using giveaways as a quick-fix solution.

Draft London planning director Erminia Blackden maintains that bribing consumers with free gifts may work up to a point, but questions the long-term impact on the brand. She says/ “Using gifts to bribe consumers might artificially boost sales, but what you are saying is ‘my brand isn’t good enough to sell on its own merits, so I’m bribing you to buy it’. Of course sales promotions are there to tip people over the edge, but giveaways work best if they are intrinsically linked with the brand and ultimately improve the brand experience for the customer.”

Brand proposition

She cites the example of the Nokia-N series, where purchasers of the new range of mobile phones receive a high-quality carrying case as well as additional content that enables the customer to immediately access the phone’s interactive features.

Blackden says: “The incentives given to Nokia-N series customers support the brand proposition, ‘my connected life’. The carry cases and content reinforce the high ticket value of the handset and showcase what it can do. It benefits everyone; the customers see immediate value and Nokia gains an enhanced brand experience and ultimately more loyalty.”

Brand consultant Simon Lubin agrees that applied properly, giveaway promotions can be a very effective promotional tool. However, lazy brand managers who use them as a stop-gap solution are fooling nobody – especially not the increasingly discerning, media-savvy consumers. He says: ” The public aren’t stupid. They know when they are being bribed to switch loyalty from one brand to another. It may work in the short term, but then when other brands follow suit and adopt a ‘me-too’ approach, there’s no advantage gained by anyone.”

Indeed there are some sectors, particularly newspapers, magazines and fast-food restaurants, where the use of promotional giveaways has become so common that consumers have almost come to expect them. Visit any newsstand in the country and you soon become aware that the promise of something free acts as a very strong magnet for browsing customers.

Catch 22 situation

Recently, newspaper publishers have been among the biggest adopters of such techniques, but now, after a costly circulation war between rival Fleet Street titles, profit margins have been hit, which has led some within the industry to question the strategy – though the papers themselves have showed no signs of stopping DVD giveaway promotions despite criticism from senior executives in their own ranks, such as Rupert Murdoch.

“The problem is,” says Lubin, “that these papers have created a classic Catch-22 situation for themselves. Because all the titles are now offering giveaways, some of them must be worrying about what will happen to their circulation figures if they stop offering them.”

However, with retailers such as HMV threatening to boycott the film companies that make deals for DVD cover mounts and big Hollywood distributors also starting to go cool on the idea, changes may happen sooner rather than later.

The Independent is one example of a national title that has adopted a more creative approach, shifting away from DVDs to language books and CDs. Marketing director David Greene says it is a strategy that accurately reflects the newspaper’s policy and also the readers’ interests. He says: “The Independent is different to other nationals because we have a smaller, more specialised readership. The paper’s added value policy is about intelligence and self-improvement, and the giveaways must reflect this – so we offer things like free maps and language courses.”

Introduced last year, the language courses proved an inspired idea, and neatly brought together the paper’s values and readers’ interests, importantly at a time when people were planning holidays. “It’s easy to overlook the importance of the timing and the positioning of promotions,” Greene explains. “We didn’t promote the CD as a free language course, even though it was, as that might have devalued it. The angle we took was ‘learn a language in six weeks’, and the courses really took off.”

Greene, a former circulation director for IPC magazines, believes that giveaways have become an essential part of the promotions mix, and customers now expect them. “I’ve seen the whole gamut of giveaway promotions from sunglasses to gardening tools,” he says. “The most successful ones reflect the values of the brand or the organisation, and where everyone works together as a team.”