Promotion pioneers keep the classics to hand

The humble promotional marketing campaign is a stalwart of many business sectors and a regular fallback when customers are perceived to be seeking value. Now that social media is allowing new ways to deliver promotions, many brands are looking anew at their strategies – at a time when promotions seem to be more popular than ever.

There has certainly been a massive volume increase in the number of traditional promotions offered over the past three years. And it is FMCG retailers that are driving the bulk of this growth with traditional money-off coupons at the checkout, along with a strong message that they are delivering value to customers.

This could be seen as a bid to offset the danger of brand devaluation that constant deep discounting can bring to branded products. But it is also an effective mechanism for bringing customers back to the store. Whether it is Sainsbury’s Brand Match campaign, or a Tesco £5 discount for shoppers spending over £40, these promotions are popular, although there has been acknowledgement that there may be too much couponing with retailers such as Tesco voicing concerns.

Traditional promotions can also be a boon for brand awareness, a crucial asset during these times of poor sales growth: consumer confidence reached a six-month low in October, according to BRC figures. Increasing brand awareness is what Billy Boy Condoms aimed to achieve from its recent promotional campaign.

Billy Boy is a market leading brand in Germany, but only launched in the UK in September. Its target is the 16- to 25-year-old demographic, and it worked with promotional agency SMP to build awareness among students by organising a comedy tour around large UK universities, where 25,000 product samples were distributed.

Inside each sample was a voucher code that could be input at the Billy Boy website for a 25 per cent discount on online purchases. “We wanted to establish our brand positioning, which is open, honest and quite provocative, in the UK,” says Billy Boy UK marketing manager Chris Clarke.

“Ours is very much a lifestyle brand approach. Rather than lecturing or being patronising to our target customer by talking about sex tips, we just wanted to hang out in places where they hang out, so that when they are in need of condoms they think of Billy Boy.”

Drawing customers to the brand’s website was appropriate for the younger adult target market and the strategy has led to an increase in online sales. Buying online also allows shoppers to sidestep the embarrassment issue when buying condoms, in particular for specific product lines:

“We have one, called Endurance, which is a solution to premature ejaculation – and probably 80 per cent of our online sales are for that product. So for that particular one our strategy has worked well,” says Clarke. The brand is now seeking to build awareness to the level at which it can gain listings in larger retailers.

Another brand that has taken its promotion strategy beyond the simple coupon is Unilever’s Omo detergent brand. Customers in South Africa were encouraged to text in an on-pack promotional code to unlock free mobile phone credit. The Omo campaign, by agency Brandtone, led to a 20 per cent increase in sales and a 26 per cent redemption rate, with 1 million customers responding.

Unilever South Africa marketing director of fabric cleaning Shaadia Vawda says the promotion was carefully researched before going live:”Ahead of developing this campaign, our brand and consumer insight team spoke to numerous consumers in one-to-one and in group interviews to get their input on our rewards programme.

“Their input covered reward options, icons to communicate campaign mechanics and overall standout, allowing us to learn what worked best. We then refined our programme to make sure the communication was simple, clear and powerful.”

Omo was also seeking to establish an ongoing relationship with consumers, with 85 per cent of respondents giving permission to do so – although it is Brandtone and not Unilever that owns the data. This can be offered to non-competing companies in other categories and sectors and is made up of more than 20 per cent of the households that use Omo.

“We are now into our third year of mobile engagement with Brandtone – and have seen opt-in rates consistently above 85 per cent,” says Vawda.

“This is well above industry norms and reflects the compelling and relevant nature of our communication. We take our consumers’ privacy and permission to communicate very seriously, and aim to send them targeted and relevant information that really adds value.”

The growing uptake of mobile devices and use of social media has seen them used increasingly in the mechanics of promotions, as brands seek new and engaging ways to interact with their customers. But marketers could be in danger of misjudging the mood of consumers when it comes to new technology, says Institute of Promotional Marketing insight consultant Paul Godwin.

Godwin says that this year’s fast.MAP Marketing Gap study shows a marked difference between what consumers think about promotions and what marketers expect them to think. In particular, there is a significant mismatch in opinions of what kinds of promotions appeal.

“Despite many marketers believing that their customers are no longer responding to traditional promotional techniques and are instead leaping to engage with brands through specialist daily deal and social media sites, the study shows the reality to be very different. It demonstrates the heavy-hitting impact of couponing, sampling and prize promotions is as strong as ever,” says Godwin.

“Some consumers are engaging with brands and retailers through new media channels but the majority are still happy to do it through traditional promotions. Why? Because they deliver commercially and continue to do it well, across all channels.”

Shoppers show a greater preference for traditional promotions, such as coupons, than marketers think and they are less motivated by social media. Godwin says that according to the study, marketers think 30 per cent of consumers often participate in promotions by Twitter but only 4 per cent of consumers say they do. Marketers expect 38 per cent to never take part in Twitter promotions but a whopping 74 per cent of consumers put themselves in that category.

In contrast, the popularity of even low value coupons has grown strongly. The popularity of 20p discount coupons grew 15 per cent between 2011 and 2012 and volume growth in redemption remains strong.

Marketing academic Dr Ben Lowe, a senior lecturer in marketing at the University of Kent, has carried out extensive research into why consumers like coupons, and whether there is a mismatch between the expectations of consumers and the managers of the promotions when it comes to adopting new technology.

“The theory tends to say that we ‘overweight’ things we are more involved in. So managers, for example, would put more emphasis on the benefits involved in an innovation and they might underweight the complexity because they have spent a lot of time working out how to use it.

“But you get the opposite with consumers: they tend to overweight things that they currently use and underweight the benefits of new things. This is because they are far more uncertain about new things and tend to be risk averse,” he says.

While new technology certainly has a part to play, Lowe cautions against overplaying its role in promotions. “You do get the innovators who are heavily involved in it but they are only a small proportion of consumers and these things take some time to diffuse.”