Promotional marketing or sales promotion is an inherent part of any B2B campaign. Edwin Mutton director general of the Institute of Sales Promotion (ISP), says: Advertising will take the horse to water but sales promotion will make it drink.
But what classifies as sales promotion? According to the ISP: Sales promotion is a planned and implemented marketing activity that both enhances the product or service is appeal, and changes customer behaviour positively in return for an additional benefit for purchase or participation.
It is, however, illegal in the context of promotional marketing for anyone to spend money for participation in a game of chance (Lotteries & Amusements Act 1976), although there are exemptions in certain charitable licensed promotions, the National Lottery being the most obvious. Otherwise promotions must either take a ‘no purchase necessary’ (NPN) route, ‘buy-one-get-one-free’ (BOGOF), competitions, free prize draws, instant win; or incorporate an appropriate degree of skill.
Companies do not need a large budget to run a successful promotion. Gill Thorpe, board member of the BPMA and managing director of The Sourcing Team, explains, Promotions do not have to be huge; they can be done in limited numbers. It depends on the type of product or market. However, she does warn that: How the brand looks and the quality of the product matters. The two must be well matched, so that there is no risk of undermining the brand messages.
Incentive gifts work as well in B2B as in B2C. Thorpe says, B2B products tend to be used around the desk or office and remind the recipient of the product or service of the giver, and anticipate redemption levels so that you have adequate stocks of the product and can replace it quickly, if necessary.
Over-redemption is not generally a problem with business promotions. However, Where there is a redemption risk, there are a number of companies such as Fotorama that will assess the risk from their statistics and charge for that, says David Lebond, executive director of P&MM. If it comes in under the prediction, they make a profit and if it goes over, they have lost and the budget is protected. It is a safety net.
Caroline Meechan, director of sales & marketing for Marriott Individual Incentives, says over-redemption can be avoided. The big mistake is to make the offer more attractive than the original purchase. She adds, An extreme example is Hoover. The whole point is to put something out that changes behaviour, even though people do not always take up the reward. And although they are getting something for nothing, do not make assumptions about your customers: just because they are into healthy eating, they do not necessarily want an offer on yoghurt.
Meechan says Marriott is becoming smarter about how it makes promotional marketing work. We use our sales promotion product to drive our business, she says. Last summer the hotel company ran a worldwide promotion in conjunction with Visa. Guests who stayed at Marriott properties and paid their bill with a Visa card got a voucher for the equivalent of £100 off a future two-night stay. If a company was using Marriott for business travel, there was a real benefit for them, she says. It is also a good example of a promotion working as well for B2B as for B2C.
Some companies view financial inducements as an ethical issue and will not take advantage of them, but they are not the only mechanic. Meechan explains, A business consumer may not want a percentage discount. Speedier delivery may be an effective promotion and may gain market share.
Edwin Mutton of the ISP says, There are pitfalls in B2B marketing and companies can lose a lot of goodwill by getting it wrong. We offer legal advice and it is best to contact an agency to set up a campaign and run it. They have done it all before.
Steve Dyer, managing director of Clockwork IMC has identified a third element to the ‘sell in’/’sell out’ dynamic in trade promotions ‘sell at’. Sell in is used to motivate the wholesaler/distributor to place a substantial stock order.
Sell out is aimed at the end purchaser: new business, reached through a telesales team; repeat business, reached through ‘invoice stuffers’ as Dyer puts it; or walk-in trade. Walk-in trade has little brand loyalty, may be an impulse buyer and is shopping for convenience, close to their current job, he says. Contractors are also most likely to switch brands because they walk in looking for deals. It is here you can pick up additional sales.
Dyer observed ‘sell at’ through stopping and restarting promotions, mainly in line with product supply. While the promotion was running at the wholesaler, there was a predicted increase in product sales. Once the promotion stopped and the promotional material was taken away, sales declined but when it was regenerated, sales increased again.
During the promotion periods, the number of redemptions/claims for rewards was low they accounted for only a small proportion of the increase in sales. From this we concluded that the sight of the promotional material at point-of-sale is enough to encourage walk-in traffic to acknowledge the promotion and purchase the product, says Dyer.
Effective point of sale (POS) material also acts as an aide-memoir to counter staff, many of whom as Dyer puts it will have competitive product part numbers in their head.
However, even given that the promotional material has arrived at the wholesaler, there is no guarantee it will be put on display. Since a small company may not be able to afford a field marketing team, an alternative is to ask the sales force to carry out a follow-up on their regular visits. Dyer says, Motivating the branch through a voucher for the benefit of them all can be enough to ensure your promotion is used.
Contractors will enter an outlet because they have a need to buy, but visitors to an exhibition need to be given a reason to visit any one stand.
A really good campaign before the event is essential something more creative than just sending out an invitation, says Gill Thorpe of The Sourcing Team, whose company sent potential visitors to the National Incentive Show at Birmingham NEC personalised badges with pink neck cords pink being the company theme.
We also enclosed a voucher to allow them to enter a draw on the stand to win an iPod, she says. Those who went to the stand received a bag designed as an iPod but with a pink head-set. There needs to be a theme through what you do. The company saw a notable increase in visitor numbers to the stand, in comparison with previous years.
The final word goes to Lebond of P&MM who concludes: A sales promotion should be legal, decent, honest and truthful and prepared with a sense of responsibility to the consumer. Anyone running a promotion should avoid causing disappointment, not just because of the law, but because of the effect on the brand image.
With careful research and planning and a large dash of creativity, a promotional marketing campaign can raise awareness and sales to considerable effect. But it will not run itself, and monitoring and measurement are an essential part of the mechanic. The big mistake is to make the offer more attractive than the original purchase Caroline Meechan Director of sales & marketing, Marriott Individual Incentives
There are pitfalls in B2B marketing and companies can lose a lot of goodwill by getting it wrong. The ISP offers legal advice and it is best to contact a motivational agency to set up a campaign and run it. They have done it all before Edwin Mutton Director general, ISP
Osram is part of the Siemens Group and a UK subsidiary of German company Osram GMBH, one of the world’s leading lamp manufacturers. The trend in lighting is towards more compact light sources that can deliver greater light output and improved efficiency. Osram asked Clockwork IMC to devise a trade marketing campaign to convey these messages as applied to its Powerball HCI metal halide lamp. The promotion offered contractors the opportunity to win a Mini Cooper S by entering the ‘Osram Powerball Mini Prize Competition’. This was supported by trade press advertising, a POS strategy in participating wholesalers and a road show. The prize reflected the Osram brand messages of miniaturisation, style and performance. There was a second prize of £500 worth of leisure vouchers and 50 mini digital cameras, plus a mystery prize for the first 250 entries received. Entry to the competition required the purchase of a specific quantity of product, the answer to a simple product question and the wholesaler’s stamp on the form, which had to be posted in the competition box on the sales counter. The competition ran for 12 months with new promotional materials provided every quarter to keep the campaign fresh. Participating wholesalers were also supplied with on-counter displays, posters and postcards for use as invoice stuffers, plus giveaways such as T-shirts and mugs. Steve Dyer, managing director of Clockwork IMC, says, The promotion was taken up by a good proportion of wholesalers with a respectable level of entries, and we believe Osram was able to raise awareness of the new miniaturised products among customers who are ordinarily difficult to reach and engage with.
