Promotional Marketing is any marketing initiative, the purpose of which is to create a call to action that has a direct and positive impact on the behaviour of a targeted audience by offering a demonstrable, though not necessarily tangible, benefit.
IPM definition
So what is the context now for promotional marketing?
It is one of responding to change, primarily in the ways and means of communication; but so much other change is happening to the lives of the consumer, the opportunity for marketers is phenomenal. Whether bringing a new product or service to market or to communicate the changes being made to an existing offer, the retailer/supplier/brand manager has both to keep up to date with shopper/buyer preference (mainly for mobile), communications techniques and the language used to stimulate the shopper/buyer – and with messages, in a sequence that research finds builds the shopper/buyers’ subconscious mind file to the tipping point, when they decide to buy. This essential book on promotional marketing covers all this – and explains why promotions are the gilt on the gingerbread.
… and for the marketer, to help with a rapid response. For the busy person needing help in an agency or within a marketing department, when the client or boss calls with the task to communicate a new direction or product or service for their business to their shoppers and buyers – oh, and to do it by tomorrow – here in this book are plenty of briefs (99 of them) and case studies (32 per cent more than the previous edition!) to feed the need to be creative and innovative. Modify them for your solution. Use the contents in the book to provide a rapid promotional marketing idea and practical response through promotional marketing and win over the shopper/buyer to a positive purchase decision tipping point – so they buy from you or your client, and not the competition. Use the points made in this book to help justify to the client your choice of promotion.
BRIEF 0.1. Neuro-Insight report that memory encoding is key to ensuring a person takes action subsequently, only storing interesting or useful items in the subconscious (source: CIM1).
The major communication change in media use by the shopper/buyer is to mobile. Though previous book editions had forecast the switch to mobile, it can now be confirmed as paramount. This book replaces the 2014 Promotional Marketing title (which replaced the fifth edition of Sales Promotion). It is a fairly urgent update to reflect the mobile revolution. Even mobile use is changing too – leaving messages is no longer acceptable as many do not bother to recall voicemails, and the use of text messaging and social media such as WhatsApp, Twitter and Instagram has replaced voice rather than live calls. The demise of apps is forecast with better websites and home pages – sized for the mobile – doing the same job as apps did.
How effective are social media messages? Very! The Labour Party in the 2017 election used mobile extensively to market their ‘offer’, with over 2.8 million shares from 925 messages over Twitter and Facebook with likes increased by 80 per cent compared with the Conservatives 159 messages with just 130,000 shares and a 10 per cent increase in likes. Brilliant promotional marketing in a plethora of messages, building up to the need to vote and to vote Labour by Momentum on behalf of Labour to catch younger voters! And they did well.
So the lesson for marketers is to copy this success:
1 Find out and match the preferred media of your shopper/buyer – and it will certainly be mobile first – but what other media?
2 The marketer needs to use and encourage social media ‘chat’.
3 Research, too, shows that shopper/buyers build up a mind file – just as Labour achieved – which means using other media in this process (PR, local ads, direct and field marketing for Labour), and these other media need to be considered as well, in this case, to achieve the tipping point – voting, and for Labour.
Read the briefs and case studies on using mobile in the book – note that Google has changed its online web search engine operation (see the briefs in Chapters 6 and 7).
Clickable content is the latest mobile engagement – a call to action response giving advertisers some measurement of the involvement of a brand with a customer – how much they share (as per Labour), with whom, how, when and where. What they share must be something like a new emoji, video or GIF – so provide it. See case studies in the book for other award-winning examples.
BRIEF 0.2. App facts. Video ads account for 63 per cent of total mobile ad spend. Eighty-one per cent of time is spent on apps than on mobile websites (19 per cent) but this is to change as apps become redundant (Google apparently says so – see below on the short life of an app). Interactive video ads can be streamed in-app. Seventy-five per cent of a survey (reported in MarketingTech) showed that a positive mobile experience increases loyalty to a brand (more on loyalty can be found in Chapter 1). There are some 5 million apps in total in the Apple App and Google Play stores (as of March 2017), an amazing fact since apps only started after the launch of the iPad 10 years previously). However 90 per cent of new users cease using an app within four weeks and never return. Apps fail to engage after a time as the content is not renewed in an interesting way. Eighty-nine percent of apps have been hacked, but improved security on the App Store from 1 January 2017 addresses the problem.
New shopping phenomena – internet purchasing (the extent now is near unbelievable – over 55 per cent), the rise of experiential marketing and the customer expectation of free delivery as a promotion for an online buy (over 20 per cent of shoppers use this as a decider at the point of purchase – found in a Valassis survey in April 2017). All these are included in this book – which covers more than just what used to be called ‘sales promotions’ (the latter now defined as promotions within the retail space, historically controlled by sales teams). The same survey found that 99 per cent of shoppers use coupons when supermarket shopping.
BRIEF 0.3. Extreme promotions. One estate agent offers a £350,000 Bentley as a promotion to attract a sale; others offer a house full of free furniture on a new flat purchase.
Coming shortly are machine learning, virtual reality and cashless shopping with instant promotions. Machine learning allows an app to teach a programme to recognise a pattern; for example, wearable technology with machine learning may detect illnesses early. Augmented reality (AR) offers seeing virtual products in your own home (more in Chapter 7). Real-time pricing is also due soon. This means the price can drop for inventory or shelf-life reasons and promotions can be run instantly – and also with raised prices: ice creams on a hot day. Amazon is introducing ‘just-walk-out shopping’ with no checkout required. Plenty of change to handle! Oh, and money: a cashless society is coming – card and contactless payments are now greater than 50 per cent. Watch out for Alipay (see next brief)!
Other apps (in future, just webpages!) allow local professional services to be found (Housecall); and finding car cleaners (Bomline) or controlling a smart home (thermostats, lights, baby monitors etc). This book is not about how to use the latest technical advancements in any media – though it takes account of them, but covers the promotional marketing content applied through them.
BRIEF 0.4. China in Spain. Chinese users have been enjoying a cashless and cardless lifestyle with Alipay in their daily lives in China. The Alipay system works using QR codes and processes the payment for the product or service. Extending the Alipay system to Spain makes Chinese tourists’ shopping experience as simple as in China, but also makes it easier for Spanish merchants to do business with Chinese customers.
Young marketers – go for it!
For those involved in promotions (10 per cent of UK jobs are in retail, so there is a certain career in it) there is a golden opportunity now for anyone who is up to speed with the latest communications, social media and technical developments such as the 3D printer, QR codes, NFCs, augmented reality, artificial intelligence (AI), data analysis providing Insight and app and web home page design.
Note that research (highlighted in Colin Harper’s book Beyond Shopper Marketing) shows the amazing divergence between what existing marketers believe and the reality of what customers actually think. Existing marketers are really out of touch and need to apply self-recognition criteria and use facts from Insight to up their game. Academics should cease teaching the 4 Ps, killed off by Ogilvy over a decade ago, and accept that sales and marketing, above and below-the-line, have all been merged and that short- and long-term relationships with the customer need to be considered at the same time when drawing up a marketing plan.
In short, unencumbered with these hang-ups, the new (young) marketer should be truly creative and use all the new technical advances available – including inventing new uses for them, grasp the power of promotions described in this book to make money for their employers and, at the same time, advance themselves. Call them ‘entrepreneurial marketers’ if you like.
An entrepreneurial promotional marketer has to have a broader understanding of marketing and how people communicate, and how to communicate messages to them through their preferred media, format and language – certainly for mobile. Communication, anyway, is a skill that is essential in life, and mastering it is the way to the top. The IPM, on a new website, is offering a resource feature and, hopefully, a discourse on communication, and all its facets will be available, produced by the author.
How the customer views promotional marketing
A simple single prospect. Fortunately, viewed from the customer – the shopper/buyer – all marketing communications are indeed promotional; they see no difference. Someone is urging them to buy or do something. This matches the discovery that it is the subconscious mind that makes most decisions for us on purchasing. So the marketing industry needs to match the shopper perception of marketing communication. That suggests that ‘all together’, integrating communicating across media as one, is the answer – for the long and the short term – with the single purpose of persuading shopper/buyers to buy a product or service, whether it’s your brand, your client’s brand or, as a retailer, selling your suppliers’ goods and services. With that point of view, promotional marketing is all marketing communication – and the marketing industry needs to organise itself to seamlessly deliver this unified purpose, for any and all marketing messages.
Do three things to connect with the shopper/buyer
• • harness data about the shopper/buyer to paint a predictive picture of each shopper/buyer as an individual (from social media, transaction data, other information);
• • create systems of engagement so that the business protects and shapes desire (i.e. upgraded CRM);
• • design the culture and brand so that they are seamless (reputation, trust building and delighting customers).
The task is entirely possible through technology – ‘listening’ to social media and ‘engaging’ with customers for life, while predicting the future needs of shopper/buyers from observation of their purchasing habits. Similarly, those who provide the marketing communication support services (see Chapter 5) should be singularly focussed with everything under one chief marketing communications officer.
Thoughts on promotional marketing – advice to the practitioner
Provide value and a positive experience for the shopper. Shoppers do look for value for money but also a shopping experience that is fun and has a positive impact, with a brand of which they approve. The best way to create fun and impact alongside marketing messages is to go for promotions.
A promotion is a better solution than just discounting for the retailer. Because straight discounting does not work long term and may kill the brand perception too, promotion is needed as a better alternative. There are lots of promotions available. The figures show that promotions are favoured in the UK by companies over all other forms of marketing, shown by a comparison of the spend on promotions (estimated as at least £55 billion in 2013) against other forms of promotion. They cannot all be wrong – so join them.
A ‘promotion’ can and should be added to all forms of advertising/marketing communication, whatever channel or media is used. The book hopes to persuade you that using promotions to create a call to action alongside all messages in all media is a large part of the answer to getting people to buy. A promotion is a separate marketing tool from just communicating a message, and in this book I have tried to illustrate the benefits (see Figures 2.3 and 2.4 in Chapter 2) of each medium and the plus factor of adding a promotion (see Figure 2.5).
In a nutshell. You, as the practitioner, need to examine the shopper/buyer engram, then adjust marketing communications to produce your desired brandgram and achieve excess share of voice (locally or for your niche) to help the shopper/buyer reach the tipping point through six media communications (each with a promotion), at which the final sales promotion persuades them and they decide to buy. The purpose of the book is primarily to help you decide what are the most suitable promotions to use and when and how to build the shopper/buyer’s ‘mind file’ until that ‘buy’ decision is reached.
Provide value for the client (the retailer/business)
Is the marketing effort providing value? Investors value the intangible, the brand. Brand finance research of the top 25 stock markets found that 61 per cent of equity value is intangible; a brand typically accounts for 25 per cent. So the concept is widely recognised and accepted by investors and, as they pay the money and reap returns, it is measurable. How much, then, to spend on marketing communications and promotion to change attitudes, behaviour and awareness, and is that valuable?
So a marketer in a company needs to know just how beneficial the spend of every pound on marketing is, both in the overhead budget and in the spend required to kick the leverage into action; otherwise, expect that the marketing budget will be cut. Call this marketing spend ‘revenue expenditure’ rather than overhead; it is what you spend to generate revenue.
If you plan to measure in advance, then promotions can demonstrate their value to accountants by way of the return generated for the revenue expenditure made. The IPM (formerly ISP) awards since 2009 – some given as case studies in this book – describe planned examples of measurement and the returns that are possible, in one case for just a few hundred pounds of ‘revenue expenditure’!
BRIEF 0.5. Promoting swimming pools. For a client selling inflatable swimming pools, a contingency of on-call advertising was prepared for use with the local radio station for when a hot spell happened, along with some premium sales promotions as the icing on the cake. The cost of the radio advertising – the revenue expenditure – set against the extra inflatable swimming pool sales made (by asking all the purchasers how they heard about the sales offer) produced the answer.
Interestingly, POPAI considered that measurement should mimic advertising in trying to evaluate impact, awareness and reach, rather than ROI. Accountants would probably consider that as ‘airy-fairy’.
Measurement and control of the spend on marketing within a company should happen. The accountants’ view is threefold: keep costs tight, reduce the item cost and then leverage sales. What does that mean for a company? By way of example: if the item is sold at £100 and the production cost is £70, then with the overhead (administration, management, marketing) at, say, £27 per item, you make £3 profit at the end of the day (or £3,000 for 1,000 items sold). To an accountant, a company makes more money by attacking each of the three:
1 Reduce the product cost (for example, by sourcing from countries with lower labour and manufacturing cost).
2 Reduce the overhead (always difficult and unpopular, and the benefit of a larger size comes in here – it’s easier to cut bits from a large organisation than from a small one where any cut is significant). Marketing is often attacked under this category: it is the first to lose out unless a clear value benefit of each pound spent is available – use the ‘revenue expenditure’ argument here.
3 Leveraging sales is considered finally by the accountant: for example, if you increase sales of 1,000 items by 10 per cent, i.e. sell 1,100 items, bringing in £110,000 at a cost of £77,000, and your overhead remains at the same level per item (i.e. £27,000), then your profit is doubled to £6,000. So a 10 per cent sales increase gives double the profit. This is a persuasive argument to accountants, but it does not take the cost of generating that extra revenue into account (often, mistakenly, through price discounting which eats into the £6,000) – persuading more customers to buy and/or existing customers to buy more – nor does it demonstrate the effectiveness of the marketing spend included in the normal overhead cost.
BRIEF 0.6. Young view mobile ads. Research shows the 18–35 age group recognise mobile advertising and view it twice as much as they see TV. Research also indicates that people use mobiles morning and evening but use a PC in the middle of the day, if at all.
Comment on the book’s content
Chapter 2 is re-inserted for those new to business and how marketing fits into business as well as describing what promotional marketing is in detail.
Chapter 3 is key. The key to winning at ‘shopper marketing’ is an intimate knowledge of the journey to purchase for each customer for each product or service – called Insight. You can then clearly chart the points at which marketing communications should be made and deliver them in a form that matches the customer communications canvas. Drive customers to your mobile-compatible website with a promotion. ‘Self-service’ in stores without a human face no longer always works, so if selling is not a firm’s core business, then it makes sense to adopt field marketing (outsourcing the sales function; see The Handbook of Field Marketing, by Alison Williams and Roddy Mullin), or investment in real sales staff, not shop assistants (who only order take!), with proper training, incentives and motivation (vouchers?) for staff.
What is not new? Research still shows a majority of retailers do not understand marketing; they often don’t employ anyone trained in marketing (and as directors or partners they are not trained in marketing themselves) and they have not carried out customer research to obtain Insight or considered any strategic marketing. Unbelievable! They are unaware that a promotion is anything other than discounting. Whereas in retail, the customer is considered and their needs met through marketing and attention at the point of sale – customers do return and shop again and again.
I continue to see a loose use of the words ‘marketing mix’ in many publications for ‘promotional mix’. The former is the Offer (see Chapter 3); the latter is how it is promoted, i.e. the channels and media you use, always with a promotion added to communicate creatively, awareness, brand values, desire, fun and support for the shopper’s decision to purchase.
Finally, the law and self-regulation: the CAP Code has now come into force on HFSS, and the use of gender stereotyping in UK is to change. No women cooking. No men doing DIY. See Chapter 14 for an overview, but it is essential to seek professional advice on promotions – before running them. Be aware too of the data protection laws (GDPR) – see the Red Eye infographic for a resumé at https://www.redeye.com/insights/blog/gdpr-12-step-infographic.
What is not in this book. The previous paragraphs envisage the future that is the way ahead; but here and now, the reality is that marketing communications is still a number of silos – advertising in all its forms, publicity, direct mail etc. To avoid an amazingly heavy volume covering all marketing silos, this book will really only focus on the global picture as far as deciding on promotional objectives and examine in detail the promotional offers (called promotions hereafter), that result and how to implement them.
So here you will not find messaging that is purely to build on the engram, hopefully matching your created brandgram, acquiring Insight to ascertain the customer view, CRM and how to influence social media other than enhancing with promotions and the technology that supports it all.
Responding to our readership
This is a book for the practitioner, a ‘how to do it’ volume for practitioners who are looking, in 2018, for a way to sell more to existing customers and to attract new customers. The readership of this book has broadened over the years. The text here is tuned to make it easier for undergraduates (previous edition a core text for the University of Westminster) and diplomates (for the international IPM diploma) to take in what they need to know. Some self-study questions are now placed at the end of each chapter. As a practitioner, be aware the law affecting promotions does change – it is essential to take legal opinion before running any promotion. Even an internet good practice code exists.
The book considers using promotions for unusual situations and when things go wrong. A case study of a public sector award winner is included – the Metropolitan Police trying to reach and communicate with black gun-carrying youths. Everyone in the professions and in charities is a consumer too, they all recognise promotions. So, just as effectively, promotions can be used in these non-retail sectors to great effect. An Eversheds (lawyers) case study is here and one for Diabetes UK (a charity). A garage can offer a days-out promotion when a service is delayed.
Case studies. Research for this book shows that readers and agencies want case studies: both new and from years gone by, and there are thousands now given online. Search the trade bodies (MAA, DMA and IPM) member’s websites (www.theipm.org.uk, http://dma.org.uk/get-inspired) for these, and also the members of EACA, the IMC Awards. The author is really grateful to the agencies and their clients who generously offered and gave permission to use case studies here this time (and EACA and the IPM) – they would of course welcome enquiries from any potential clients or jobseekers (including interns who seek jobs – marketing communications industry apprentices!) – see Part IV of this book.
Briefs. Packeted information is included here – the Brief – which is an extract from somewhere – a newspaper, journal or magazine either in print or online or heard at a seminar to illustrate a point in the text.
Final comment
Do participate in promotions as a customer – it is an easy way to learn. Analyse them. Why did you participate? Did it persuade you to do what they wanted? Did you feel better about the brand? Find a brand that is communicating and not offering a promotional offer and consider how you feel about that.
I hope I have communicated my passion and enthusiasm for marketing and here, promotions in particular. I can but commend the book to the reader.
Roddy Mullin
March 2018
Note
1 Please note that all abbreviations in the text are defined in the Index; for example here CIM is the standard use for ‘Chartered Institute of Marketing’, a mouthful not commonly written or said.