I first became involved in the world of marketing a very long time ago, back in the 1980s. And in those halcyon days, there were only two types of agency… advertising agencies and promotional agencies. The world of advertising always seemed more glamourous and profitable, whilst we grafters in the promotional agencies considered ourselves as the poor relations.
Then the rules changed. Clients started cutting their TV budgets, and suddenly the perception of promotional marketing shifted from ‘down and dirty’ to ‘measurable and results-driving’. In the headlong rush to grow and take advantage of our new-found legitimacy, many promotional agencies rebranded, becoming ‘marketing communications agencies’ while many others were bought out by larger media companies seeking to ‘offer a full service solution’.
As a result, by the mid-1990s, traditional ‘pure sales promotion’ agencies became much less common. And that’s the point at which I believe we lost a lot of the promotional innovation and creativity that abounded in the 1980s and 1990s.
Sales promotion became a part of a bigger ‘strategically integrated’ mix, rather than the sales-driving, profit-generating, market-share securing Dark Art that had lured and seduced us back in the day…
Then, something else changed out in the marketplace. ‘Every day low price’ (EDLP) became flavour of the month and retailers and brand owners have been locked into a downward spiral of Mutually Assured Discounting ever since.
With margins being cannibalised and price wars breaking out in every aisle, discounting was never going to be a sustainable way of driving sales for anyone. However, while the retailers drove the pricing agenda at first, many big name brands started to fight back by competing on EDLP with the very own label products created to undercut them in the first place. And that’s a really risky strategy, both in terms of profitability and cash-flow and from the perspective of brand integrity.
When premium brands start to devour themselves in the price-cutting frenzy, it’s only ever going to end badly!
But you know what? I think there’s a bright new opportunity on the horizon, with old-fashioned, hard-working, brand-building, loyalty-driving, value-delivering (I could go on!) Sales Promotion becoming more relevant today than it has been for many years.
Think about it. Sales Promotion works a treat online, offline and – almost by definition – in-store. It could have been custom-designed back in the 1980s to dovetail with the social media onslaught of the noughties!
And, at a time when retailers are demanding more and more and more from brands to secure volume sales, an innovative and eye-catchingly irresistible Sales Promotion can…
- · Create a valid reason for the brand to stand-out at point of purchase and on the web…
- · … without using a price offer or discounting;
- · emphasise the product’s USP through the Sales Promotion creative…
- · … and use that creative in every medium, offline and online;
- · reward a potential customer’s interest long before an actual purchase, via social media;
- · then stimulate and reward that customer’s purchase via a Sales Promotion mechanic;
- · turn that customer’s business into repeat sales via loyalty-driving post-SP activity.
Here’s another thought for you. It’s great to grow a brand through NPD and range extension, but most new products launched in the UK fail within the first two years. So by using the larger budget usually allocated to the launch-phase of a new product to incorporate Sales Promotion into the plan, you can keep your product visible on-shelf and at the forefront of the consumer’s mind long enough for it to establish itself in its own right.
So I rest my case, ladies and gentlemen of the jury. The 1980s may have been the decade of the mullet, the ra-ra skirt and Kajagoogoo; but it also spawned creativity in a marketing discipline that’s potentially just as powerful and totally relevant today!
Simon White is Managing Director of sales promotion & partnership agency Campaign Marketing, which has clients including Unilever, Heinz, Premier Foods, Dairy Crest and Waitrose to name a few.