Promotions. Why one instead of many?

One of the historical “deliverables” of marketing is promotions. For many distributors, marketing was confined to three areas – events, premiums (those logoed “throwaways” / wearables) and promotions. Typically, all were funded, or at least co-funded, with manufacturer dollars.

While distributor marketing, for many, has evolved and marketing is viewed more favorably by distribution leadership and, in some instances, critical to achieving differentiation in their market as well as a revenue generator, especially in targeting unassigned accounts, promotions remain an element of each distributors marketing mix.

This is especially true in contractor-oriented distributors. They appeal to audiences that are defined as small to mid-sized, independently owned contractors and/or contractors where field personnel can make decisions.

Larger contractors may get involved in promotions; however, rarely do they influence decisions.

The biggest benefit of promotions is often their communications value. Their ability to capture attention due to them promotion creativity – its theme – and/or the rewards.

Some may remember Alan Sipe. Alan was SVP Sales and Marketing for Klein Tools for 27 years and then spent 10 years establishing Knipex Tools in the US.

Alan writes for Vehicle Service Pros which is a publication serving the automotive parts aftermarket. That industry is a two-step distribution channel. Manufacturers sell to wholesalers who sell to jobbers who sell to technicians / repair shops. Think of Snap-On Tools or MAC Tools.

He recently wrote an article titled “Promotions That Have Only Winners” and brought up a number of interesting points and things that electrical distributors should consider (and I’m paraphrasing elements of the article and I encourage you to read it, considering that the “technician” would be the equivalent of an electrical contractor.

Some points from Alan’s article:

Promotions that have one winner … “Do you know anyone who ever won these prizes? No? Well, neither do I. Additionally, you never hear if anyone really did win or not! These traffic building promotions don’t motivate me to ever go to the casino. I don’t need them to motivate me to lose my money. I can do that all on my own.

The point I’m making is that promotions that I have zero chance of winning not only do not motivate me, but pretty much just aggravate me. How about you? Do promotions where you have a small or no chance of winning motivate you? Probably not.”

So why do so many mobile jobbers run these promotions time and time again. “Buy this tool set and get a chance to win a shotgun.” Or “Spend X amount and get that many tickets to maybe win a new TV.” Each of you probably have 200 to 250 technicians (think contractors) on your books. So, when one of them wins the prize, the remaining 249 are less than happy. They are hopefully not so down that they will stop buying from you, but why run a contest that could make all but one of your customers unhappy? Even a little.

Marketing Ideas:

“Create a Fund-A-Need: A Fund-A-Need is a money raising program aimed to help a specific need. A local technician’s child is in the hospital and needs a helping hand. Maybe a school or orphanage you know needs some new computers. In today’s world, maybe some help for a war-torn country. Any worthy cause is fine, just nothing political.”

CMG Observation: Promotions tied to charities / worthy causes work, especially if they are local causes. We have implemented this strategy with a number of customers and each time clients report sales increases; suppliers report sales increases; everyone feels that they benefited and gave back to the community. In some of these we have also had contractors earn T-shirts with the promotion and charity. The T-shirts are in “bright / outlandish” colors, but the contractors wear them because they are supporting a local cause and … they are free!

We’ve had a couple of times where the local “cause” is the contractor. Earn a cooler and then, for every purchase, minimum of $X receive a free case of water (and in some cases we’ve put the distributor name on the water.) Guess who places an order for their “free” case of water (just make it a SKU in your ERP system.)

“Host an after-work selling event and fundraiser: This takes a bit of work to pull off but can increase your sales, entertain your customers, and do a good deed too. These events are often operated by two or even three mobiles (think possibly branch locations or involving multiple manufacturers) carrying the same major logo whose territories are connected. This makes for a bigger and more profitable event.”

CMG Observation: Consider this as a different way of running a counter day. Rather than display the product at the branch, invite customers and the supplier, or multiple suppliers, to a location. Provide food and drink (and there are differing thoughts regarding the “drink” … but can always leave that expense to the customer, possibly with some of the proceeds going to a worthy cause / charity. A different venue may drive more visitors to engage with you (relationship building) and your sponsoring supplier(s).

Peel and Reveal

On a drive this weekend I was listening to the radio and an ad came on that reminded me of another “old” strategy that can still work. The concept is a peel and reveal.

Essentially it is a label that can be peeled off and reveals the prize.

• Want to run a price promotion … put varying percentages under the labels and affix the label to the product. The customer peels the label and determines their discount. (Want to see labels, here’s a company that offers this. I haven’t used them, so no endorsement.)
• Want to make it more flexible. Enter numbers under the label (i.e. 1, 2, 3, etc) and each day or each week change what percentage each number equates to.
• Want to drive traffic to your website? Reveal the number value on your website.
• Want to promote joint sales calls? The same concept can be applied to a peel and reveal card. The card is given to the customer upon the visit. Every card is a winner. (Wondering what a peel and reveal card could look like, and they can be in shapes, check out this company. Note: Found them on a websearch but have not used them, so this is not an endorsement of them.)
• For an online order, cards (even in the form of a postcard) can be sent to customers. Encourage them to visit your website, place an order and enter the discount code when they check-out. It could be the percentage or a number. ES Tech Group has shared research that people who use your website three times to place an order are more likely to continue using the site. The key is building the behavior.
• Want to promote a specific manufacturer or SKU during a counter day? Put a peel and reveal label (and here’s a supplier with a process for “print your own”), with varying discounts. Each sales is a winner (highest % for an order applies to the entire order). Worried about the promotion cost (typical distributor concern)? Do what is done in retail – the supplier pays for the discounts (which is the same as what a premium item may cost). And yes, some suppliers will be worried about “runaway costs” (remember, runaway costs mean more product was sold). Simple, put a “do not exceed” cap on the promotional cost. The reality is customers will purchase additional items.

Over the years we’ve used “peel and reveal” for clients with poker and black-jack themes, racing, baseball, and football themes. And in a price discounting format as, sometimes a price discount is the reward.

We have a supplier that works with us on the creativity, application and sourcing “small” print runs of the peel and reveal. A key, I find, with promotions is a promotional supplier who will assist with creativity and “going the extra mile” to fulfill your ideas AND brings ideas … cost-effectively (but not necessarily the least expensive as if you want premium ideas, should compensate appropriately.

For other promotional thoughts, here’s some prior postings:

• 10 Keys to Promotional Programs
• Promotional Ideas for Manufacturers and Distributor
• Football Fever
• Walters Gives Product Away

(and yes, the older postings are missing graphics … a hosting issue … but the content is the key – and in some cases the links still work.)

The bottom line is that promotional creativity sells. It captures the imagination. It communicates and engages. It differentiates you and generates sales.

And, as Alan says, a one winner promotion essentially means everyone else loses. Or, in other words, these are the easy, non-thinking, ways of running a promotion.

Two Questions

1. Which do you think performs better – promotions with 1 winner or promotions with many winners?
2. What promotions have you seen, or run, that you think are creative, fun, “easy” to develop and/or have been successful? (and feel free to post anonymously if you want or send to me for “cleansing” and sharing.)