All promotions need suppliers. This chapter describes them and deals with how to select and use them. Promotions are different from one to the other, so each promotion often needs different suppliers from the last one. One of the reasons there are so many case studies in this book, and not all new ones, is to assist the reader by providing a creative wealth of ideas that can be used as a basis for new promotions.
There are two models of supplier relationship: the ‘quotation model’, which assumes that you know what you want and can obtain the lowest price and best terms from a range of suppliers by setting out your specification as an invitation to quote; and the ‘partnership model’, which assumes that you will obtain the best solution by working with a chosen supplier from the earliest stage, incorporating the supplier’s skills into the specification. This second model is often called ‘partnership sourcing’. That supplier is most likely to help if you build up a long-term relationship and bring the supplier into the planning of a promotion from the earliest stage.
There are organisations that will help you find a supplier: the DMA, IPM and MAA websites contain listings or contacts to obtain lists. The MAA offers a confidential Agency Selector service. They also offer guides on writing a brief, creative critiquing, agency remuneration and the pitch process, all of which have been developed with the client trade body the Incorporated Society of British Advertisers (ISBA).
Promotion agencies
Who they are
Most promotions are conducted by people who are not promotions specialists – marketing managers, sales managers, managers of small businesses and executives in general advertising agencies. In a number of large consumer goods companies, promotions are under the aegis of a (sales) promotion manager, but even then implementation is often the responsibility of non-specialist sales and marketing executives.
Many of the biggest and most high-profile promotions are developed and implemented by specialist promotion agencies. They are often called ‘consultancies’ because, unlike insurance or advertising agencies, they derive much of their income from fees rather than commission. However, promotion firms also derive a proportion of their income from selling artwork, merchandise, print and other services, which is not normal practice among consultancies. The word ‘agency’ is used here as the description commonly applied to firms engaged in providing marketing advice, consultancy and implementation.
Outside these lists, there is a wide variety of agencies that include the words ‘promotion’ in their list of services. Some are advertising agencies, which may or may not employ dedicated promotion specialists. Some are purveyors of particular promotional vehicles, such as travel or merchandise, and may be very competent, but they are not necessarily impartial about the types of promotion they recommend. And some are newer agencies, which may be extremely good, but have yet to qualify for MAA membership.
How they work
There are many different ways that promotion agencies originate, and this is reflected in their continuing diversity of structure. Some began as spin-offs of (sales) promotion specialists working in advertising agencies; others as the breakaways of advertising agency (sales) promotion departments; others from a base in supplying print, merchandise or incentives; and yet others (and this is increasingly the case) as greenfield start-ups that are meeting the growing demand for specialist promotion services. Nowadays the use of descriptions such as ‘shopper marketing’, ‘brand delivery’ is added to the agency title or they use way-out titles such as ‘broccoli’, ‘juice’, etc.
Despite the variety in their size and structure, promotion agencies have a number of features in common:
1 They charge for creative and conceptual work on a fee basis that reflects their time input. This method of working – comparable to that of solicitors and accountants – means that it can be possible to use them simply for creative thinking and to do the organisation and implementation of a promotion yourself.
2 They are normally equipped to supply design, artwork, premium sourcing and a host of other services that are needed to make promotions happen. Sometimes these services are supplied in-house, sometimes they are supplied by subsidiary or associated companies and sometimes they are subcontracted. Agencies will always make a margin on these services, but their prices benefit from economies of scale and can be highly competitive.
3 They work on an ad hoc or continuing basis. It is conventional for advertising and PR agencies to work with clients on a continuing, contractual basis. Promotion agencies like to do this, and increasingly do so, being paid a retainer rather than one-off fees. However, many clients still use them on an ad hoc basis, briefing them for particular promotions as and when required.
4 They are increasingly involved in a broad range of marketing services. Most of these apply also to the use of an integrated mix of promotion, direct mail, PR and other marketing communication tools assembled to meet particular needs. The disciplines of promotion agencies provide a good basis for providing these integrated marketing services, and many have taken up the challenge.
5 Account handlers are heavily involved in the creative process. There is a tradition in advertising agencies for account handlers – the people who meet the clients – to be largely excluded from the creative process. In promotion agencies, this is not the case. The creation of effective promotions is an interdisciplinary, brainstorming affair, simultaneously conceptual and practical, and the person you meet will play a central role in that process.
6 They tend to be of moderate size. This reflects partly the relative newness of the industry and partly their low start-up costs. New agencies tend to be tightly run, enthusiastic and entrepreneurial and almost always run by the people who set them up.
7 They are able to give impartial advice on the type of promotion that will most meet your particular needs. This is perhaps the most important benefit of their fee basis of payment. They have no particular axe to grind over whether or not the promotion is a competition, an on-pack or a mail-in or uses travel, clothing or cash. In a world where there are many axes ground, that is a bonus in itself.
Promotion agencies earn their living from a combination of fees for time spent and mark-ups on goods supplied. The balance between the two will vary, but most commonly includes a fee for time spent, normally calculated at £60–£372 per hour, depending on the seniority of the staff involved, and a mark-up on goods supplied (print, artwork, premiums and so on) of 15–20 per cent. These two combine to give an overall margin of 25–30 per cent (lower for bigger jobs and higher for smaller jobs).
What to look out for
Choosing the right agency is a difficult process. The MAA offers a full intermediary service. Its consultants will search the MAA membership for the right-fit agency, deliver their credentials to you, organise chemistry meetings and, if needed, manage the entire pitch process, all within best practice guidelines through its Agency Selector service. Both the IPM and the MAA publish annual awards on websites and in brochures, detailing the best promotions of the previous year.
A relationship with a promotion agency normally starts with a pitch. The MAA (described on their website as Agency Selector) and the ISBA have devised a set of guidance notes for pitches. They provide a good basis for the often vexing process of competitive pitches, and are obtainable from either the ISBA or the MAA (see ‘Further information’ at the back of the book for details). The principles are to treat each other with fairness:
1 Prepare the background information properly.
2 Don’t ask more than three agencies to pitch.
3 Write a proper brief (see Chapter 12) and allow time for it to be responded to.
4 Decide quickly and objectively.
5 Give the losers the chance to learn how they could have done better.
Fees for pitches are a subject of regular dispute. The MAA’s Code of Conduct discourages its members from making speculative pitches. The reason is that promotions are devised for a particular brief and so have no salvage value. Some companies pay agencies a briefing fee, sometimes known as a pitch or rejection fee. Nevertheless, if an agency produces acceptable work but the promotion is not run for reasons outside its control (for example, you have changed your own plans), it is only right that it should be paid for its work. It is an open question as to whether or not agencies should be paid briefing fees for competitive pitches. Agreeing to pay them intimates that it is recognised that each concept is tailor-made for each brief and has no salvage value. Equally, it is always possible to find smaller, hungrier agencies that will pitch for nothing.
In practice, most agencies are happy to compete against a reasonable number of others for a real piece of business, and all of them are happy to compete for ongoing business. The distinction is one of common sense. If you repeatedly brief half a dozen agencies for single promotions that may not even materialise, they are unlikely to find it profitable to respond. Conversely, if you brief a limited number for promotions that do materialise – and particularly with a view to establishing a long-term relationship – most agencies will respond professionally and effectively.
There are five key attributes that companies normally look for in their promotion agencies, which form a handy checklist for selection:
1 Creativity. The capacity to produce promotions that are more imaginative, more effective and more eye-catching than you could do yourself is the fundamental reason for using an agency. Creativity should stand out in an agency’s presentation of its work.
2 Communication skills. Promotions are produced to meet specific marketing objectives. In the way it presents its work, an agency should be able to demonstrate an understanding of a range of different marketing situations and of the techniques appropriate to communicating effective solutions.
3 Budget control. Implementing promotions requires a range of design, artwork, premium, handling and other resources. It is not important that these should all be in-house, but an agency should be able to demonstrate that they are to hand and that it can control them within your budget.
4 Good service. A successful promotional relationship requires client and agency to be on the same wavelength. It is important to meet the people you will actually work with – not necessarily the same people as those who make the new business presentation – and get on well with them. Just ask your team if they get on with the prospect agency – is the chemistry OK? If not, don’t use them.
5 Good track record. The evidence from awards brochures and from the trade press is critical here – and a call to existing clients can also tell you about qualities of service and budget control that might not be obvious from published work. This is probably the best tip.
Having applied these criteria, you may end up with three agencies you feel you could work with. It is then common practice to put a brief to all three and to make a judgement on the basis of their response.
Once you have run a promotion with a particular agency, you will be able to judge its performance in practice. There are broadly three ways you can work in the longer term:
1 Occasional supplier. This is an arm’s length approach – the agency is given the minimum information necessary for the job, is always in competition with others and is briefed only when the need arises.
2 Rota member. This is a compromise approach, where two or three agencies are put on a rota of agencies used by the client. Rather more information is given and some or all briefs will only be given to one of the agencies on the rota.
3 Business partner. Here, a single agency is appointed to work as an extension of the client’s marketing department. Marketing plans are discussed jointly from an early stage, and a renewable contract establishes an ongoing partnership.
Agencies understandably dislike the first approach. It makes planning their own business difficult and results in a high percentage of wasted and unprofitable work. Clients that insist on ‘occasional supplier’ relationships can find that they are presented with off-the-shelf promotions, dusted down and rejigged without too much thought and effort, generally from second-rate agencies.
Clients are understandably wary of the third approach. It does involve putting all their eggs in one basket and can lead to complacency and staleness on the part of the agency. Retainer fees, paid on a regular monthly basis, are liked by agencies as they provide a regular income. However, they only make sense when there is a steady, predictable flow of work.
For these reasons the second approach is often where client and agency find themselves in mutual agreement. It gives the client flexibility and it gives the agency a reasonable basis for predicting the amount of business it will get. Variants on this approach include using one core agency most of the time, but trying out others for particular briefs or in particular areas where the core agency may lack specialist expertise.
Is it worth letting between a quarter and a third of your budget go to the promotion agency? If the agency is any good, the answer is ‘yes’, and for three good reasons:
1 Part of the agency’s margin will be covered by buying promotion items effectively and by its ability to produce promotions cost-effectively.
2 Part will be covered by saving your time in devising, planning and executing the promotion.
3 Most importantly, a good agency will produce a promotion that is measurably more effective.
Even an agency uses promotions …
Case study
Case study 19 – Giant Chip Fork by TLC Marketing for TLC Marketing
TLC Marketing (TLC) is a creatively-led rewards and incentives agency, providing tactical ‘everyone-wins’ promotions for brands through an extensive partner network. Operating in an extremely competitive market, characterised by lots of agencies all fighting for the same business and decision-makers, generating new leads is critical. TLC realised it needed to apply the creatively led approach it offers its clients to its own marketing, targeting 20 marketing directors at brands which would work well with a ‘free fish and chip’ partnership promotion (e.g. condiments, beer and football sponsors).
A giant chip fork was created with witty copywriting, delivered in envelopes featuring a scan of an Evening Standard article about fish and chips being the UK’s favourite takeaway. Copy provided clear context and relevance. For a budget of £310, the return so far from one new client campaign has been £60,000, with two more potential campaigns in discussion. An IPM 2017 Gold Award winner.
Handling houses
Who they are
Handling houses originated in the need for premium items to be warehoused, customer applications to be received and processed and goods to be dispatched. From this basis, handling houses have grown into sophisticated businesses that offer data capture, database building, inbound and outbound telephone call centres, barcode scanning, downloading of e-mail sites and a range of customer interface operations.
How they work
Poor handling can destroy consumer confidence in a promotion and the brand behind it, as well as create considerable work for you as you try to limit the damage. Conversely, good handling can create added value in the information collected about participants in promotions, and build consumer confidence through the promptness and accuracy of your response to them. The following 20-point checklist identifies the details to be included in briefing a handling house:
1 the promotion: incentive offered, instructions to applicant, any restrictions on entry;
2 handling requirement: how it should be done, turnaround time;
3 duration: start date, close date;
4 response forecast: anticipated volume, variation over time;
5 promotion media: on-pack, press, TV, direct mail;
6 application format: coupons, leaflets, plain paper, telephone;
7 point-of-purchase requirements: number, type, tolerances, count procedure;
8 payment requirements: amount, coins, cheques, postal orders, credit cards, charge cards, tolerances, need to await cheque clearance;
9 bank account: client’s, handling house’s, responsibility for charges;
10 postage and dispatch: first-class, second-class, discounts for bulk mailings, recorded delivery, registered, carrier, cash floats for postage;
11 packing: pre-packed, envelope, padded bag, carton;
12 goods storage: quantities, period, special security;
13 insurance: client’s, handling house’s;
14 application details: captured manually, computerised, fields required, deduplication, selections, sort criteria;
15 reports: type, frequency, period covered, analysis headings;
16 consumer relations: incorrect applications, correspondence, com-plaints, returns, exchanges, refunds;
17 audit: retention of applications, record of dispatch dates;
18 stock control: reorder levels, returns, final disposal;
19 goods inwards: delivery dates, counting in, quality checks, receipts;
20 security/confidentiality: expectations, special requirements.
Thinking through what you need under these headings will ensure that both you and your handling house know what is expected. You can also obtain an accurate quotation for the job. Clearly, these vary depending on the amount of work involved. You should ask what a typical cost might be for receiving and checking three proofs of purchase and dispatching your item, or for setting up an inbound telephone call number, receiving calls for a brochure, data capturing and posting the brochure.
What to look out for
If you brief your needs early enough, handling houses are an ally. The main decision you face is one of cost and sophistication. If all you need is the receipt of applications and the mailing of items, there are local facilities in most parts of the country that will do the job for a low cost. However, this is probably missing an opportunity, in terms of both data capture and customer relations. More sophisticated operations cost more.
Points to look for include the audit trails a handling house offers for goods and cash, the scale of its computer operations, the training it gives to telephone staff, the efficiency and security of its warehousing and the nature and timeliness of its reports. All these mark out the sophisticated from the low-cost operation. Whatever type of handling house you use, make sure you have a good contract.
If you are running promotions regularly, it makes sense to build a long-term relationship with a handling house that becomes an extension of the company for both you and your customers.
Point-of-purchase manufacturers
Who they are
Drawn from a background in shopfitting or design, the leading firms are members of the Point of Purchase Advertising Institute (POPAI), set up in the US in 1936, in Paris in 1989 and in the UK in 1992. Point-of-purchase manufacturers enable promoters to attract attention, communicate offers and brand image, and increase impulse sales at the point at which the great majority of purchase decisions are made. The activity used to be referred to as point of sale (POS), but the initials created a confusion with electronic point of sale (EPOS). POP is clearer, but watch for the fact that POP is also the acronym for proof of purchase.
How they work
The incorporation of sound, light, movement and promotional offers in a single unit has moved POP well beyond its origin in cardboard dumpbins or PVC shelf-barkers. There are wonderfully creative people called ‘cardboard engineers’ who make incredible designs. Examples show the inventiveness and scope of POP:
1 Cadbury’s Creme Eggs enjoy a short but intense season between January and Easter. Advertising is wasted unless there is adequate display. A dumpbin with some new gimmick is the annual offering.
2 Spillers Petfoods developed a ‘shelf purrer’ to launch its cat food brand Purrfect Selection. The battery-operated device sensed customers within a 12-foot radius and set off a voice message, ‘Indulge your loved one with a can of new Spillers Purrfect.’
3 A video display has been demonstrated which directs the audio to a particular spot at ear level, as if a person is standing next to you. This could be outside a shop window with the video inside and audio outside. Customers using a mobile could place an order when the store is closed, with payment collected and the item delivered the next day.
The primary applications of POP are in sectors that sell via retailers. Leisure outlets such as hotels, pubs and sports clubs are also important. However, POP is increasingly used to communicate brands well away from their normal sales outlets. Interactive displays in shopping centres, airports or anywhere else people gather can sell almost anything. Increasingly, the use of smart-card technology and interactive video and text messaging enables promoters to target particular offers to particular people, capture data about them and communicate product benefits and promotional offers wherever people have the time and propensity to respond. As people arrive at an airport in a new country, information on where they can buy their favourite brands can be instantly made available to them (along with the messages from the new mobile service provider and their charges!). Remember to add a QR square! These are now used on bus-stop posters.
What to look out for
Promotion is about influencing behaviour. Consumer behaviour at the point of purchase is the behaviour that matters most. The enormous point-of-purchase operation to introduce the UK National Lottery was implemented in less than 4 months, long after other elements of the mix had been put together.
Critical points to look out for in using point of purchase are:
1 Think early about POP needs and integrate them into your advertising and promotional planning.
2 Use it to gain exposure in non-standard outlets; there are often great opportunities for joint promotions based on a POP unit.
3 Make the best use of increasing opportunities for light, sound and movement; there are real benefits to being an innovator in POP.
4 Think hard about the operational issues, especially who will distribute, site and install the units and (if high-tech) keep them running.
The leading manufacturers in the field are increasingly able to offer an all-in design-to-upkeep service. For details of them, contact POPAI (the web address can be found in ‘Further information’ at the back of the book).
Promotional risk management companies
Who they are
Remove financial risk. When it comes to setting up a promotion, there is an element of financial risk involved which can, if ignored, prove damaging to the promoter and the brand. If a promotion is a runaway success, with more people responding to it than you anticipated and, more importantly, budgeted, huge financial costs may be incurred. Promoters (you!) therefore need to be aware of the risks and how they can protect themselves and their balance sheets.
Specialist promotional risk management companies, such as PIMS-SCA, exist to provide services that protect balance sheets against the risk of over-redemption. PIMS-SCA conducted an evaluation of all their insured promotions over 10 years, noting that approximately 2 in every 12 promotions produces an over-redemption. This analysis also demonstrates why promotional risk management is an essential part of any promotional campaign – would any promoter take a near 10 per cent chance that the promotion will cost far more than expected?
Three main promotional risk management services are provided by PIMS-SCA. They help promoters plan promotional expenses, eliminate budget overruns and add or increase high prize values while keeping promotional budgets fixed and secure:
1 Insured fixed-fee contract. This is the best way of providing the maximum level of protection for a promotion, from sourcing the incentive, the logistical management of the promotion and the risk of over-redemption through to the handling and fulfilment of a campaign. The promotion market has moved on to increasingly sophisticated promotional campaigns, with the result that promoters and their agencies now have to deal with complex handling and fulfilment scenarios that may include a variety of redemption mechanics.
Trying to handle a promotion with an SMS text and web-based redemption ability, combined with a no-purchase-necessary route plus a promotion hotline and the usual prize fulfilment requirements, may be too many ‘moving parts’ for the average promoter and agency. This is where fixed-fee companies can prove invaluable: all are regularly involved in promotions of this type and can easily take on the most complex promotions with ease. (PIMS-SCA uniquely offers the most financially secure insured fixed-fee product, as each and every promotion is covered by a £10,000,000 insurance policy with ‘A’-rated insurers.)
Note that the majority of promotions will not perform to expectation and thus may under-redeem. The majority of promotions perform well in comparison to expectation, but what if it is your promotion that performs particularly badly? As PIMS-SCA demonstrate, 1 out of every 12 promotions achieves very poor responses against expectation. To remedy this, pioneering the introduction of the under-redemption guarantee to the industry should a promotion significantly underperform, PIMS-SCA will pay back a percentage of the fee on an insured fixed-fee contract – the promoter may be disappointed by the poor response but is not left feeling it has paid way over the odds for the promotion.
2 Over-redemption insurance. This protects against the financial liability of a promotion redeeming above the expected response rate. This is best utilised when a promoter feels comfortable that the risk is minimal above a certain level and wishes to keep the risk fee as low as possible. For example: a promoter chooses to buy risk protection between 10 and 20 per cent, and is prepared to accept the risk above 20 per cent.
3 Prize coverage. This allows promoters to leverage their existing budget in order to increase the prize fund available. The risk management company takes on the risk for a one-off fee and, if there is a winner, pays out the prize at no extra cost to the promoter. For example, a £10,000 promotional budget can be turned into an on-pack promotion offering the chance to win £350,000 worth of prizes.
How they work – which coverage is best?
If the promoter is using a tried-and-tested mechanic and is reasonably confident of response levels, then probably fixed fee is best. The likelihood is that the response levels will approximate to expectation and thus the promoter will have gotten good value for money from the fixed-fee company, as most of the fee will have been used to pay for the responses to the promotion.
If the promoter is running an untried mechanic and is targeting a new set of customers, PIMS-SCA would recommend over-redemption insurance. The Great British Public can be a fickle lot, and not so easy to predict. Many ideas that look good on a concept board do not find favour with the consumer. The result can be a low take-up – a fixed-fee solution could prove very expensive under these circumstances.
The experience of PIMS-SCA, as a leading industry stalwart, is that fewer than 1 in 40 promotions redeem at more than double their expectation; therefore buying a band of coverage is not necessarily such a bad option. Financially, one could argue that it is the most prudent choice for a promoter. Promoters should be aware of the benefits of promotional risk management and how it can impact on a promotion and ensure balance sheet protection. To assist promoters estimating response rates for various mechanics, PIMS-SCA has compiled data on thousands of promotions over the years and created a free-to-use online promotions database. Visit www.pims-sca.com/promodatabase to try it.
What to look out for – things to keep in mind when choosing a promotional risk management company
If another organisation is taking on a huge risk for you, be 100 per cent sure that, if required, they are able to pay out in full by checking their accounts. For instance, if they have three £1 million promotions and all require payment, can your chosen company pay out to all?
Ideally, marketers should ensure that an ‘A’-rated insurer supports the underwriting of every promotion, for maximum financial protection, guaranteeing payment is possible, no matter what. Look at their past experience and the ability to offer actuarial analysis and evaluation and advice on logistical and security procedures, together with proven handling and fulfilment capabilities.
PIMS-SCA produces a ‘Guide to promotional risk management’ booklet detailing all promotion mechanics and the factors to take into consideration plus anticipated response rates – see ‘Further information’ for details of how to contact them.
Other insurance products
4 Printer’s errors and omissions – protects the promoter from the financial consequences that arise if errors are made by a printer when printing promotional game pieces or literature.
5 Event cancellation and non-appearance – ensures that, if events or promotions are affected by unexpected problems outside of the promoter’s control or the star attraction fails to appear, the promoter’s financial interests are protected.
Specialist printers
Who they are
Many promotions use standard leaflet, brochure and packaging printers. If you are intending to run an instant-win promotion or to use games or scratch cards, you need to enlist the services of a specialist printer. Other printers specialise in the short runs that are sometimes needed for display material or individual-outlet promotions. Still others specialise in label leaflets (those that carry a large amount of information in a concertina leaflet the size of a sticker).
How they work
If you are running a game or instant-win promotion, you need to know that the right number of winning cards has been printed, that they are evenly distributed, that there can be no leakage of cards from the printers or distributors, that they cannot be counterfeited and that you can verify the winners. This is a tall order and leads to constant innovation in the technologies involved.
Part of the development is in the inks used. Latex overprints are the standard format for game cards. Developments include heat-sensitive inks that reveal a message on being touched, cold-sensitive inks that respond to a cold drink being put on them and microwave inks that respond in a microwave. Case study 67 discusses an imaginative promotion for Sarson’s vinegar – it used an ink that responded to vinegar. Another development is to replace hidden messages with a crack-open card that reveals another card inside. Special inks can increasingly be used on ceramics, plastics and textiles.
Avoiding counterfeiting has led to the development of computer systems for verifying winning tickets. One process is to mark winning tickets with a security number that, when entered into a database, shows the exact layout of the card. Another is to print winning tickets with codes that only show in ultraviolet light or that can be read only when matched exactly to a template. Holograms and three-dimensional technology are also used – and the best techniques, naturally enough, are not disclosed even to promoters.
What to look out for
Make sure you use a printer who really understands this business: winding up, as one retailer did, with 27 winners of its top prize in the first week of a promotion is a cost you cannot afford. Ensure, also, that your printer has errors and omissions insurance that specifically covers games.
Once the material has been printed, look closely at the procedures for packing and distributing winning tickets. If you are including an instant win inside a product (for example, underneath the cap of a bottle), make sure it is safe against tampering, both by retail staff and by consumers. Keep up with evolutions in game technology. Games succeed as much by novelty as by the scale of the prizes being offered. It is well worth using a specialist printer’s knowledge to be the first in your field to use a particular ink or game device.
Field marketing and brand experience agencies
Who they are
Field marketing and brand experience agencies offer a large number of mainly part-time staff as a long-term extension to your own company’s staff (outsourcing the sales function – typically at a saving of 15 per cent over the in-house provision and with sales targets in effect under contract to be delivered!) or to undertake one-off projects. Some 40,000 people are employed part time in the business. A large firm may have as many as 15,000 people on its books (people working in the industry are often on the books of several companies). For further information on field marketing, see The Handbook of Field Marketing by Alison Williams and Roddy Mullin (published by Kogan Page).
The major firms are increasingly moving towards full-time staff working on long-term contracts for major promoters. They also overlap with handling houses in offering database, storage and dispatch services as well as staff. You can expect a competent agency not just to provide the personnel, but also to plan geographic coverage, create briefing materials, dispatch and control the items needed in the field, monitor and control the staff, analyse the results and even design and produce special uniforms for the personnel.
Field marketing and brand experience agencies are found at http://www.fieldmarketing.com/agency-directory. The same principles and selection as given for promotional agencies apply (see previous section). On the website, the agencies are split into field marketing subcategories. The ones of interest to promotion are direct sales, sampling, roadshows, experiential event, national and international. The support suppliers, which include venues, stages, stands, road show vehicles, signs, screens and interactive media, event management etc., are found at: http://www.fieldmarketing.com/industry-directory.
How they work
Field marketing personnel can be employed to do almost anything that needs people out in the marketplace. They can act as a sales force to smaller outlets, install promotional material (this is usually done poorly by many retailers), distribute leaflets and coupons, hand out samples, collect consumer data, undertake mystery shopper calls, staff exhibition stands, sell directly to consumers, provide information in shopping centres and airports and carry out blind product tests. Their application in promotional campaigns is huge.
Prices vary depending on the nature of the work to be done, but are typically based on a personnel cost of £13.50 per hour. A typical brief may be to call on independent retailers with promotional material and stock. Taking planning, travel, briefing and supervision into account, you could expect to pay £25 per outlet visited for a contract call service. A tactical call would be less.
What to look out for
The critical point to remember is that field staff are part of your firm as far as the people they meet are concerned. There is a balance to be struck between the cost a firm charges and the level of briefing, training and supervision that your own staff receive. Increasingly, the emphasis is on higher quality, and rightly so. Effective use of field marketing agencies depends, as with every other promotional supplier, on clear briefing and a clear understanding of what you want to achieve. The motivation to sell is probably higher when outsourced – to meet the contract targets – than with in-house staff, however incentivised.
Premium sourcing houses
Who they are
Open any of the three promotional magazines and you are confronted by page after page of advertisements for clocks, sweatshirts, electronics, model cars, crockery, books, pens – you name it, it’s there. The British Premium Merchandise Association (BPMA) acts as the trade association for manufacturers of premiums, and its magazine is an effective advertising feature for its members’ products. For any given product area, there are also endless sources of manufacturer information in trade directories and, increasingly, on the internet.
Why not go direct to these companies to buy the premiums you need? For small quantities and for standard items, it often makes sense. These businesses are not large – few have a turnover of more than £10 million. However, for large quantities, special products and products made in the Far East, it can make most sense to go to a company that is set up to design, source and ship promotional premiums to your specific requirements. These are the premium sourcing houses. They typically have extensive contacts in the Far East; a direct or indirect base in Hong Kong; design facilities in the UK; processes for quality checking in the country of origin and other developed countries; and extensive knowledge of international customs regulations, product safety legislation, shipping arrangements and trade finance. There is another alternative.
The Sourcing Team www.sourcing.co.uk works hand in hand with the BPMA and offers some really useful guidance on ethicability and sustainability – nothing worse than discovering your premium merchandise has been manufactured in a non-sustainable way using child labour! Three useful websites on this are:
• ETI Base Code, http://www.ethicaltrade.org/eti-base-code
• SEDEX, http://www.sedexglobal.com/ (empowering responsible supply chains)
• UN Global Compact http://www.unglobalcompact.org/
How they work
Premium sourcing houses ensure that promotional items are created, manufactured and delivered to the specific needs of a promotional campaign. Examples from the past show the nature of their work:
• Nestlé has a continuing requirement for products that give ‘playground cred’ to Smarties among 7–9-year-olds. The right premium ensures that Smarties remain an attractive product for this age group and not just something that your kid sister eats. Developments in low-cost consumer electronics meant that it became possible to create the Zapper. This is a Smartie-shaped widget with eight coloured buttons that emit noises of sirens, machine guns and the like, and is cheap enough to offer with five proofs of purchase. The electronics were manufactured in one country, the plastic casing in another. It has been supplied to Nestlé subsidiaries throughout the world.
• Mugs are a promotional evergreen, used by coffee, tea and confectionery manufacturers, among others. Traditionally, they have been sourced in the UK, but UK prices are not competitive in world terms. There are a number of low-cost producers, but their quality has often been inadequate. There are also increasing regulations governing the toxicity of printing inks. Long-term collaboration between a sourcing house in the UK and a Far East factory led to the development of the right mug for KitKat at the right price.
• Another high-profile promotion run by Nestlé was themed on magic tricks. The company had identified a series of injection-moulded magic tricks that it could obtain from China, but was forestalled by quota restrictions on imports from China imposed by the EU. Its premium sourcing house was able to identify a manufacturer in India and help the factory meet unfamiliar quality requirements.
What to look out for
You can expect a premium sourcing house to have extensive contacts with manufacturers throughout the world and to have a track record in creating and manufacturing products and shipping them across the globe. Pay particular attention to their quality systems. If you value brand reputation, it is not worth skimping on the quality process. Premium sourcing houses registered to ISO 9001 will have demonstrated the capability of their systems. It is seldom worth the risk of dealing with an intermediary company offering products at knock-down prices that cannot demonstrate quality systems.
It is worth bringing premium sourcing into an early stage of the discussion of promotions. In a number of markets – children’s products in particular – the choice of premium may be critical to the success of a promotion. A good premium sourcing house will understand marketing as well as premiums. If you form a long-term relationship with a sourcing house, you will often be the first to hear of innovative products that are right for your market.
Case studies
Four case studies here illustrate how fixed fee, over-redemption and prize coverage can be insured.
Lime Communications created an exclusive on-pack campaign for Tangerine Confectionery’s Butterkist popcorn brand and Universal Films, aimed at attracting and rewarding consumers while enforcing popcorn’s association with the movies. PIMS-SCA co-ordinated and managed the coupon element of the campaign while ensuring total balance sheet protection from the outset.
Objectives: To increase penetration. To build an association with films.
Mechanic: The campaign appeared on over 8 million promotional packs across six Butterkist product ranges. Consumers purchased promotional packs of Butterkist and entered their unique promotional on-pack code at www.butterkistproductions.co.uk or via Facebook to instantly reveal if they had won a prize.
Thousands of movie-related prizes were up for grabs with a £1 million total prize fund: five holidays at Universal Orlando, 10 trips for two to a London premiere, 25 private screenings for up to 50 people, 100 home entertainment systems and thousands of DVDs. Each promotional pack offered consumers a 50 p money-off-next-purchase coupon to be downloaded for print and redemption.
PIMS-SCA’s role
E-Demption powered the 50 p money-off-next-purchase-coupon element of the campaign, including building the promotional microsite, coupon production, coupon processing webpage creation and coupon print notification e-mails as well as providing additional insight into coupon usage. With over eight million potential 50 p-off coupons up for grabs, PIMS-SCA’s fixed fee covered the costs associated with all coupon redemption, including invalid redemptions, therefore removing the potential £4 million exposure from the promoter’s balance sheet. As well as providing £1 million prize coverage and incorporating their secure draw server into the campaign to allocate prizes, PIMS-SCA liaised with the DVD suppliers in order to fulfil the thousands of prize winners.
Blue Chip Marketing developed a free mail-in campaign for McCain Smiles in partnership with the National Literacy Trust and Penguin Books. With over one million classic children’s books up for grabs, each worth £2.99, PIMS-SCA provided a fixed fee for total balance sheet protection.
Objectives: To drive penetration.
Mechanic: Leaflets featuring a URN, together with reading tips, were inserted into 2 million promotional packs. Consumers collected two unique codes from the packs and visited a promotional microsite to enter them, together with their contact details, and claim one of six Ladybird Treasured Tales for free. Books on offer included The Gingerbread Man, Little Red Riding Hood, Cinderella, Jack and the Beanstalk, Goldilocks and the Three Bears and the Three Little Pigs.
PIMS-SCA’s role
PIMS-SCA was asked to ensure that all financial risk was removed from the promotion, and supplied a fixed fee solution accordingly. The fee included managing the availability and supply of the requested Ladybird books along with all the handling, financial and logistical management associated with the promotion.The fixed fee solution ensured that McCain ran a secure, risk-free promotion with complete balance sheet protection as each and every PIMS-SCA fixed fee includes £10,000,000 of coverage with A-rated insurers.
Case study 22 – Carbon Marketing for Discovery Foods
A two-pronged in-store campaign for Discovery Foods consisting of a money back guarantee and a money-off-next-purchase coupon mechanic.
Objectives: To increase sales of Discovery Foods products.
Mechanic: Promotional staff in selected Tesco and Sainsbury’s supermarkets encouraged consumers to buy Discovery Foods products while handing out leaflets featuring a 50 p money-off-next-purchase coupon. If the consumer spent over £3 but wasn’t happy with the Discovery Foods purchase, he or she was refunded up to £3 by writing to the manufacturer, explaining the reasons and enclosing the till receipt.
PIMS-SCA’s role
PIMS-SCA performed a risk evaluation of the campaign and provided a fixed fee solution for total balance sheet protection. The fixed fee covered financial, risk, logistical and administrative management of the promotion as well as coordinating handling services to take care of refund applications. All coupon redemptions and the associated costs were covered to ensure Discovery Foods’ budget remained fixed and secure.
PIMS-SCA is the only risk management company in the UK to provide clients with a fixed fee product fully backed by A+ rated insurers as well as £10 million worth of cover for each and every promotion.
Case study 23 – PIMS-SCA ‘£25,000 Santa Search Winner’
Each Christmas, PIMS-SCA sends its clients and suppliers a Christmas card offering the chance to win a big cash prize as a thank you for their business throughout the year.
Objectives: To reward clients and suppliers with the chance to win £25,000 via an annual online Christmas card.
Mechanic: All clients and suppliers registered on the PIMS-SCA database received an e-mail wishing them a merry Christmas plus the chance to win by playing a free online scratch card. Players clicked on the link and opened three windows on an advent calendar game to search for Santa. A variety of Christmas-themed characters could be found behind the windows as well as three Santas and if just the three Santas were revealed, the player won £25,000. Players could have unlimited free practice plays before playing the one-shot £25,000 prize play game.
PIMS-SCA’s role
PIMS-SCA designed and created the online scratch card game as well as covering the £25,000 jackpot with their very own prize coverage. Result: Mr John Kirk of Counter Attack Promotions correctly revealed the three Santas and won the £25,000, paid out by PIMS-SCA. He said: “I’m looking forward to spending some of the money taking my wife to Tuscany, my grandchildren to Disneyland Paris, making a donation to The West Midlands Air Ambulance Service that I have supported for about 20 years and maybe an Apple iMac for myself.” PIMS-SCA sales director Matt Butcher said:
“This is the third time we have done this promotional Christmas game and thrilled to have a winner. We certainly hope it was a Merry Christmas for John and it will be a great start to 2014 for him and his family.”
Case study 24 – Kerrygold win a bag instantly
In a campaign to increase penetration, a bespoke 100 per cent pure cotton Kerrygold shopper bag was offered to one in four purchasers on the reverse of 600,000 promotional sleeves on 250 g packs of Kerrygold Lighter or Kerrygold Softer butter. Losing packs included a 20p money-off-next-purchase coupon. To claim the bag, winners sent off the promotional sleeve or went online to enter a unique pack reference number. Other activity included promotion in Asda’s in-store magazine plus a door drop promotion to Sainsbury’s customers. The fixed fee solution provided by PIMS-SCA ensured Kerrygold’s promotional budget remained fixed and secure from the outset, no matter how many consumers claimed the bag or redeemed the coupons.
Case study 25 – New Zealand Herald $25 camera offer
To encourage daily purchase, reward subscribers and increase occasional purchase, readers of the Herald could collect six tokens and send them with $25 plus $5 for postage and package to claim an RRP $79 digital camera. The self-liquidating promotion was covered by PIMS-SCA to give total financial security for the newspaper. The result was amazingly successful, with 18 times more than the expected uptake.
Case study 26 – Golden Wonder ‘Crack the keycode’
To increase penetration, Golden Wonder ran an on-pack promotion to win one of 25 brand new special-edition VW beetle cars. PIMS-SCA hosted the promotion and covered the cost of 24 out of the 25 cars on offer should consumers successfully crack the winning eight-digit codes devised for each car, Golden Wonder only covering the cost of one. If no one won a prize, then all entries were entered in a free prize draw so Golden Wonder had at least one prize winner.
Summary
Promotion agencies, handling houses, POP manufacturers, promotional insurers, specialist printers, field marketing agencies and premium sourcing houses form an infrastructure of businesses with one common thread: making promotions work. There are others, too, including the companies that supply off-the-shelf promotions. The trade press regularly reports on them, not least because they provide a substantial amount of advertising, and that makes much of the reporting uncritical. You need to use the trade press and exhibitions such as Incentive World.
If you do any amount of promoting, you are likely to need all of these companies at some time. It pays to identify a company in each sector with a solid financial basis, to consult with them at an early stage of promotional development and to build up a long-term relationship. No promoter can hope to develop specialist expertise in each of these fields. It makes sense to use them for their skills. If you decide to put all your promotions to a promotion agency, it still makes sense to know who they are using for specialist services. One weak link in the promotional chain – whether it is handling, premium sourcing or field marketing – is enough to destroy a promotion. Promoters should be aware of the benefits of promotional risk management and how it can impact on a promotion and ensure balance sheet protection.
Self-study questions
1 What issues should you take into account when organising a pitch among sales promotion agencies?
2 What are the main things needed in a brief for a handling house?
3 What things can you use promotional insurance for, and why should you do so?