NOT JUST FOR BREAKFAST ANYMORE

SLOs are moving pretty fast these days.

Once mainly fodder for the cereal aisle, self-liquidating offers have cooled their heels a bit in the land of flakes and puffs, but are springing up elsewhere in-store as a bevy of other packaged goods categories liven up offers — and reduce expenses — with marketing’s pay-for-itself premium.

New York City-based Unilever’s Bertolli brand, for example, is currently trading a recipe book and nostalgia magnet (bearing images from 1940s ads) for a UPC and $3.95 (or the book alone for $2). Handled in-house, the effort is promoted solely on neck-hangers, with the recipe book refreshed regularly to entice repeat purchases.

Being the lone SLO on the olive-oil shelf has worked extremely well: Bertolli is shipping 5,000 to 8,000 orders per month — 40 percent of which are for the book/magnet combo, and getting a bump in incremental volume in the process. “We’ve realized the power of self-liquidators,” says marketing communications manager Paul Barrett. “There are hundreds of olive oil brands consumer can buy. We’re using these premiums to our advantage.”

Other categories are trying to do the same. A quick stroll through a local supermarket last month uncovered a noticeably high number of SLOs in the snacks aisle. Offers from East Hanover, NJ-based Nabisco ranged from free Koosh toys on Toastettes pastries to a five-piece finger puppet set dangled on Teddy Grahams. Charlotte, NC-based Lance Snacks is currently taggging an offer for diecast NASCAR car replicas on the backs of Toast Cheese crackers.

Refrigerated sections are getting saturated as well. Salisbury, MD-based Purdue Farms earlier this year executed an on-pack offer for a 10-ounce Thomas The Tank Engine drinking mug (through a licensing deal with London-based Britt Alcroft Ltd.) Shoppers mailed in a proof-of-purchase and $2.99. DVC Group, Morristown, NJ, handled.

And virtually every yogurt SKU boasts an offer. Minneapolis-based General Mills’s Yoplait is running a campaign serving Sesame Street books on its Yumsters kids cups. Londonderry, NH-based Stonyfield Farm is dangling squeeze-light key chains on packages of YoSqueeze.

The strengths of SLO programs have been constant through the decades: They provide marketers with an opportunity to encourage purchase, while letting them recoup the investment on the offer. Because consumers help with funding, brands can deliver better-quality items than are usually available as free premiums. They’re also good for products that don’t have room for an in-pack premium.

“They provide an easy and inexpensive way to bring perceived value into the market,” says Karen Sauder, account director with St. Louis-based Zipatoni, which is currently readying a Halloween campaign for Milwaukee-based Miller Brewing Co. trading MGM videos for proofs and $4.99 (see Campaign Trail). “Many times they do more for brand affinity than they do for actual sales.”

Moving merchandise is always the ultimate goal, but a little affinity can go a long way. Chicago-based Web retailer PennMedia has research that shows the tactic can bump sales by as much as 27 percent. “Before we began offering SLOs, conversion rates were around one percent,” says ceo Jaffer Ali. “Since we began using them, the rates have jumped to 69 percent. SLOs aren’t loss-leaders. They pay for themselves.”

Here are four other trends changing the shape of SLOs — both literally and figuratively.

The Quality: Ten years ago, the de rigeur SLOs were T-shirts, caps, beach towels, and other low-cost apparel items. Today, they tend to be more high-end and high-tech, ranging from videos (à la Miller’s effort) to electronics (McDonald’s offer of Tiger Electronics’ HitClips mini-audio players last year) and a lot more.

They’re also becoming more unique: Supplier Premium Image Group, Wilmington, NC, has designed everything from talking spoons and singing yo-yos to “space scope” flashlights. “Consumer expectations have been raised over the last few years,” says company president Wayne Carlstedt. “Technology now allows for better and more creative premiums.”

The Price: As the quality goes up, so does the cost, meaning the redemption price for consumers must rise accordingly. The average face-value of SLOs has jumped at least 50 percent in the last five years, according to suppliers. Although the $1.99 offer can still be found, it has now been joined by prices of $4.99, $5.99 — and even higher.

Nabisco’s El Paso, TX-based Milk-Bone dog biscuits ran an FSI earlier this year carrying a pair of dollar-off coupons and an SLO for a ball toy for two UPCs and $8.99. To celebrate its 25th anniversary (and publicize a cause tie-in with Children’s Miracle Network) last spring, juice maker Apple & Eve, Roslyn, NY, ran an on-pack offer for one of four Sesame Street books for $6 and two proofs of purchase.

Consumers don’t seem to mind the price hike. “The right product with the right offer is what’s important,” says Eric Greifenberger, category business director with White Plains, NY-based Kraft’s Post Cereals unit.

The Quantity: Technology and price aside, premium suppliers and marketers concur that average initial product orders are shrinking as brands try at all costs to avoid overstock. It’s difficult enough trying to unload piles of unwanted toys, but the strain it puts on a marketing budget can be heavy.

To protect themselves, marketers are looking for suppliers to allow minimal initial orders and multiple reorders once the requests start flowing in.

“Everybody’s been burned on a premium. We’re seeing contracts being revised,” says Carlstedt. “They now call for 50,000 premiums up front instead of 100,000, and reorder quantities of 10,000 at the same price as the original order.”

Parsippany, NJ-based Days Inn, which regularly uses SLOs in its spring and fall promotions, restructured its ordering process last year to better match redemption. Last spring, the hotelier dangled CD-ROM games in front of travelers, but didn’t begin ordering the discs from Pawtucket, RI-based Hasbro until orders came in. Later, when it ran an offer for Peanuts videos, distributor Paramount Pictures, Los Angeles, allowed the chain to order in increments of just 500. “Ideally, we try to order nothing up front and build the stock as orders come in,” says vp-marketing Nancy Poor. “You have to force yourself to be very efficient with SLOs, or face the consequences.”

The Role: An increasing number of brand managers are using SLOs less often as a stand-alone program and more often as a complement to sweepstakes. As marketing gets more integrated, “the more elements of a promotion, the better,” says Poor.

Purchase, NY-based Pepsi-Cola Co. just wrapped an offer for T-shirts bearing pictures of Major League Baseball stars Sammy Sosa, Ken Griffey, Jr., and Jason Giambi as an add-on to a larger on-pack instant-win sweeps. (TLP, Inc., Wilton, CT, handled.) Dean Foods, Franklin Park, IL, used a soccer-ball offer to herald its Chugs bottled milk line’s ties to the sport and a related sweeps. (Flair Communications, Chicago, handled.)

“It works well this way,” says Kraft’s Greifenberger, who says Post now uses self-liquidators exclusively to complement sweeps. “They’re a way to give every consumer an opportunity to get something out of our promotions.”

A soft economy has made marketers accountable for every dollar in the budget. So brand managers are being picky about how they use SLOs, and employing all of the above strategies to make their efforts more effective.

Offers should keep getting more creative, ordering and fulfillment should continue to be streamlined, and more categories should enter the arena, as marketers elsewhere learn what cereal makers have long known: When used right, SLOs work.

Take It SLO

Eleven must-haves in the offer.

1. CLOSING DATE: Clearly explain when the last requests will be fulfilled.

2. ADDRESS FOR APPLICATION: State where consumers should mail requests.

3. SPECIFICATIONS: The offer and the premium must conform to legal and/or consumer product guidelines. The premium should be illustrated or photographed if possible to let consumers know exactly what they’re getting.

4. CONSUMER COSTS: Include price and/or any shipping & handling charges.

5. PROOFS OVERLAY: List number and actual proofs of purchase required.

6. CONTROL MEASURES: If applicable, state entry limits (per household, etc.).

7. APPLICATION FORM: Explain how to apply for the offer and through which channels (mail, Internet, in-store, phone).

8. DISPATCH DATE: State how long it will take for consumers to receive the premium once the check is received.

9. PARTICIPATION LIMITATIONS: Clearly state if there are any limitations based on age, company affiliations, or geographic location.

10. PROMOTER’S NAME: Include a customer service phone number and address for any problems or questions.

11. EXCLUSION OF RESPONSIBILITY: Explain who is, or isn’t, responsible for applications that are lost, delayed, or incomplete.

Source: Institute of Sales Promotion, London.