A World Without Sales Promotion…

Imagine a world without sales promotion. No buy-one-get-one-frees; no toys inside cereal boxes for children to collect; no money-off coupons for your favourite brands; no loyalty schemes to earn you valuable points that you can exchange for any number of products, experiences or services. Not a tempting prospect, is it? And that's why the whole UK marketing community needs to champion this vibrant and creative discipline in order to protect its role as a key motivator for consumers and staff alike.

There's no denying that the current business climate is a tough one and sales promotion is feeling the pinch along with all other elements of the marketing mix. Promoters are cutting budgets and demanding that those budgets work harder, go further and produce better results. But, ironically, this is where sales promotion can come into its own because it creates a tangible and very real link between the brand or company being promoted and the consumer which can, most importantly, be proved through data collection.

Whether you are rewarding excellent service by staff or distributors with vouchers, or encouraging consumers to be loyal to your particular brand with a token collection scheme for a range of gifts, the very nature of sales promotion invites your target audience to form a relationship with your company or brand. This means that sales promotion offers so much more value than mere advertising - the advertisement might be the trigger to interest the consumer initially but the promotional offer, and subsequent offers, are designed to keep them loyal. Add to this the ability to track your promotion's results and the valuable data on the preferences and persuasions of your target audience that can be gathered in the course of a campaign, and sales promotion emerges as one of the most cost effective ways of ensuring that your brand retains, and increases, its market share.

The cyclical nature of marketing is one that we in the sales promotion industry are getting used to and anyone predicting the demise of a particular discipline or trend is on very dodgy ground as the recent launch of Nectar illustrates perfectly.

How many column inches were devoted to the death of loyalty schemes when Wal-Mart bought Asda back in 1999? The price v. promotions debate was fired as Asda, and then Safeway ditched their point schemes in favour of price-cutting, leaving Tesco to go it alone with its phenomenally successful Clubcard promotion. But Sainsbury's has ushered in a new era by joining forces with Barclaycard, BP and Debenhams to launch Nectar a 'super loyalty scheme' that enables consumers to collect points in more ways and redeem them for even more products, services and gifts from a host of high profile brands. 12 million households are predicted to join in the first year, earning themselves an estimated 50 billion Nectar points and with a £40 million marketing campaign to back the launch of this reward scheme, there can be no clearer indication that the brands involved believe that delivering rewards to consumers - the pure essence of sales promotion - is the way to go.

The shifting sands of consumer trends shape many aspects of business, and sales promotion is no exception. For companies to survive they must become adept at predicting and responding to the demands of the market and there is plenty of evidence to illustrate that the industry is developing the skills to do this. Being flexible and ready to adapt quickly is an essential trait for any company looking to succeed in the increasingly competitive promotional marketing field.

Vouchers play a major part in the UK sales promotion sector, primarily as an effective way to reward staff but also to motivate consumers, yet this particular sector has had to face some tough challenges in recent years. The VAT and National Insurance concessions enjoyed by vouchers may have been lost but the voucher providers have come out fighting, offering even more redemption options, not least the rise of the 'experience'. As well as vouchers for consumer goods, food and wine, recipients can now choose to spend a day being pampered at a health spa or roar round a race track in a Ferrari. Such innovation has enabled the voucher sector to retain its share of the UK incentive market, a fact made evident by the total annual sales of the members of the Voucher Association which reached £1.15 billion in 2001.

As with many aspects of life, potential threats or changes can often become opportunities for growth. The perfect example of this is the rise of the text message mechanic in promotions. As well as being an obvious way to communicate with a huge number of consumers (who doesn't have a mobile phone nowadays) it is also an environmentally friendly way of creating a dialogue with your consumers. Leafleting is not allowed in Ibiza because of environmental concerns but flyers for special events and gigs are a staple of promoting to the 'clubbing generation'. Orange discovered that SMS messaging or 'virtual flyers' were the perfect solution to this problem during a campaign to support its involvement with the island's Manumission club this summer. The brand could still communicate with its target audience but it wasn't damaging the environment in the process. The moral of this story - where a 'problem' exists creative sales promotion can overcome it!

Along with mobile phones, the Internet is the other technological innovation that we now cannot live without. Again, this was viewed with trepidation initially. What would it mean for sales promotion? I can tell you - it has meant the opening of yet another avenue of opportunity.

Whether you are looking for key-rings, mugs and T-shirts or something more ambitious such as drinking glasses that reveal a message when filled with liquid, business cards that emit a telephone ringing sound when they are picked up or products that change colour when cooled or heated, you will now be able to find them on the world wide web - and the British Promotional Merchandise Association (BPMA) and its members are at the forefront of harnessing this new technology to promote the huge range of promotional merchandise on offer. The BPMA website (www.bpma.co.uk) should be any promotional buyer's first port of call, containing comprehensive listings of every BPMA member and the products and services they provide plus a quick and easy search facility to pinpoint the particular product you need quickly.

And some of our members are taking the concept even further. Sites that will enable you to select the product you want and display it on-screen emblazoned with your logo in a couple of clicks are increasing in number. Some even enable you to set up a 'virtual office' to track the progress of the manufacture of your goods - from shots of the factory to quality control test results and shipping times - enabling you to keep a close eye on progress, something that is essential when up against the tight deadlines that promotional marketing demands.

There's no doubt that sales promotion is an ultra-effective way to build any brand but current trading conditions are challenging and merchandise suppliers and agencies are having to fight hard for their share of the promotional pounds.

Creativity is essential for success and it's an element that should run right through any sales promotion agency, from the way they pitch for your business, the way they approach brand new clients, and how they deal with existing ones, and how they formulate new product ideas for the future. Effective sales promotion is all about finding solutions and delivering results. So, if your clients are cutting their budgets think about how can you help them to make the most of what they can spend without compromising their brand's identity or the quality of the offering.

Just as every good promotional campaign adds value with a relevant gift or reward, merchandise suppliers are starting to add value at the source by expanding the range of services they provide. Companies that can offer a more complete range of services and prove their knowledge of all aspects of the sales promotion industry will always have a head start. The manufacture of a piece of promotional merchandise is just one part of the equation - the item will also have to be personalised with a logo, packaged and delivered to the recipient - so proof of expertise in printing, packaging and fulfilment is becoming ever more important.

But arguably the most important way to ensure that your brand continues to thrive in such a competitive sector is to provide quality - in both the products you supply and the service you provide. You need to feel secure in your choice of supplier and that is why working with a BPMA member makes real commercial sense. The Association demands that every one of its 800 members adheres to a strict 22-point code of conduct which requires them to act professionally, honestly and fairly at all times, giving buyers an assurance that they are dealing with reputable companies.

Looking to the future there will no doubt be more opportunities and more potential obstacles to overcome - not least from Europe.

Since the first plastic daffodil bloomed in one of the earliest and best remembered promotional campaigns, different rules for promoting products have existed in each European country. However, with the advent of the single currency and the desire for a single market for sales promotion there have been ongoing and protracted discussions about how this should and could work in practice. The BPMA has been at the forefront of these discussions - working with the Institute of Sales Promotion (ISP) in a joint venture, the European Promotional Marketing Alliance (EPMA) - lobbying hard in Brussels for over nine years to ensure that the promotional freedoms that the UK enjoys are continued, with the ultimate aim that our system of self-regulation is the one adopted by the entire European continent.

This is a tall order and resistance continues to come from many quarters. Concerns about consumer protection and the emotive subject of promoting to children top the list of bugbears for a number of countries but the EPMA is committed to proving to the doubters that ethical promoting is the keystone of the UK system. You can provide comprehensive consumer protection and deliver effective sales promotions without restrictive legislation and red tape and that is what the EPMA is working hard to prove. A major breakthrough came in September when the European Parliament voted through proposals that would initiate the creation of a true single market for sales promotion but these still have to survive scrutiny by national governments before being presented to the European Parliament for a second time. Political climates are subject to the same winds of change as the business world so we can expect many shifts of emphasis and ups and downs before we reach our goal, but the European issue is far too important for the sales promotion and marketing industry to ignore.

In Europe, as the BPMA has learned, the consumer is king. Therefore one of the major future challenges that sales promotion, and the entire marketing sector, has to face up to is how to prove that creative promotional campaigns and consumer protection are not mutually exclusive - in fact they go hand in hand. No brand worth its salt would ever knowingly target an inappropriate promotion at a 'vulnerable' section of society or 'reward' them with shoddy or unsafe goods. The whole point of promotions is to build brand values and create positive associations for that brand in the minds of consumers - so it's not in anyone's interest to run unprofessional or unethical campaigns. There will always be the 'rogue traders' who pop up from time to time but they are firmly in the minority. We must not let these few bad apples distract attention from the vast majority who delight consumers every single day with meaningful and rewarding promotions.

We need to respect, protect and value the system we have created - because a world without sales promotion would certainly be a much duller place.

Richard Wood
Chairman
British Promotional Merchandise Association