Sales promotion 473
Building relationships through promotions
Because promotions go beyond the ‘magic
bullet’ approach to communication, they create
opportunities to build relationships between
the promoter and the target. In consumer
markets this is often achieved through loyalty
schemes. The Boots Advantage Card, for exam-
ple, has around 13 million members, and over
50 per cent of its sales are linked to the card.
Through this loyalty scheme, the company has
been able to identify and target its most
valuable customers by sending out a free health
and beauty magazine to its top-spending 3
million card holders.
Three areas in which relationship building
is central are in trade promotions aimed at
retailers and distributors, in supporting and
encouraging sales activity, and in developing
marketing partnerships with other companies.
Many products rely heavily on retailer support,
and increasing trade promotions reflects their
importance in maintaining good channel rela-
tionships. Intermediaries have begun to
strongly influence the extent and nature of
producer promotions, as P&G found when
their strategy of reducing reliance on promo-
tions ran into retailer opposition.
Trade promotions are less varied than the
consumer promotions in Table 18.1, but operate
from similar principles. Intermediaries are
offered special discounts or payment terms,
gifts, contests, sales information or extra prod-
uct to gain their enthusiasm and shelf space.
Microsoft’s promotion for its UK dealers aimed
to encourage them to sell branded rather than
generic mice, and involved a ceramic musical
money box modelled on the Mouse 2.0 in a
cheese wedge-shaped box along with a bro-
chure and some cheese wedge sales aids. The
number of dealers making Mouse 2.0 sales
increased by 55 per cent over a three-month
period. Some companies have developed clubs
for dealers and intermediaries to try to improve
communication and marketing support within
supply chains. British Car Auctions in the UK
and Rover cars in Germany have both launched
on-line clubs to support their dealers.
Promotions also play an important part in
supporting the sales efforts of industrial mar-
keters. The negotiation of special deals for key
customers, participation at trade fairs, product
samples and the provision of product informa-
tion all play a vital part in reducing the buyers’
perception of risk and helping to win contracts.
Promotional gifts as humble as calendars, pens
and mugs all play a part in communicating,
and in keeping the promoter’s name at the
potential purchaser’s fingertips. At the dark
end of the spectrum, bribery could qualify as a
form of promotion, and in offering inter-
mediaries extra benefits, a producer must
always be sensitive to their targets’ policies
towards the acceptance of promotional gifts.
Salesforce contests are another form of
promotion used by around three-quarters of all
companies who sell. Their effectiveness is often
undermined in practice by overemphasizing
financial incentives and by allowing them to
become an expected part of salesforce remuner-
ation. More imaginative companies have dis-
covered that effectively designed salesforce
promotions can have a major impact. British
Car Rentals had a significant problem in the
imbalance of business between weekdays and
weekends. To stimulate weekend rentals they
devised an ‘Oscars’ competition for their sales-
force. Branches were sent movie-themed dis-
plays and ‘props’, and sales staff could win
movie merchandise, with a trip to Hollywood
for the top performing team. The result was a
sales increase of over 450 per cent.
Promotions allow producers to join forces
to take advantage of synergies between their
products or similarities between their target
markets. This can create some unlikely alliances,
unthinkable in terms of joint brand–sell adver-
tising. Barclays Bank teamed up with Kelloggs
to offer on-pack bank deposit coupons aimed at
getting children to eat more cereals and open a
bank account. The Clorets breath fresheners
brand sought to establish an association of ideas