Tip Sheet/Incentives April/May 2009

Helpful Hints
PREMIUMS

Why Premiums Work at Retail

Premiums and incentives are a sure-fire way to gain attention at retail — via online promos, in-pack, as handouts or as mail-in rebate rewards.

The incentives come in all flavors, varieties and price points. Right now, gift certificates for a night out at the movies or the latest DVD are a few options moving product as consumers cut back on entertainment spending.

For example, Hostess got together with Dream Works Animation to promote the DVD release of “Madagascar: Escape 2 Africa” with an on-pack sweeps offering the chance to win a trip to San Diego for an animal adventure. People registered online to win a five-day trip for four.

Kellogg is running an on-pack promo for its Yogos snacks. Customers who buy the products have a chance to instantly win a Yogo Bucks gift card. Kellogg is giving away 25 $100 gift cards as grand prizes. Other winners will receive gift cards with smaller values. In all, Kellogg is handing out nearly 50,000 gift cards through the promotion

Saputo’s also recently ran an on-pack promo for its Frigo Cheese Head brand. That promo, tied to “High School Musical 3,” gives people who purchase two of the cheeses and send in the proofs of purchase an exclusive poster of the film with signatures from the cast members. The promo appears on more than 125 million individual wrappers.

GO GREEN

TIP 1:
The move to develop green promotional products is taking root. Imprinted mugs and reusable water bottles are replacing orders for disposable cups and bottles. As consumers look to lessen the burden on landfills, reusable totes available in organic cotton fabric or recycled materials are hot items to replace plastic grocery bags.

TIP 2:
The types of items people are buying with gift cards are changing, so give cards that can be used to buy necessities, like socks, underwear and gasoline.

TIP 3:
Don’t forget promotion. Promotional spending related to loyalty programs increased 3.6% to $2.1 billion in 2007, according to Veronis Suhler.

REWARDS MAKE A DIFFERENCE: It pays to keep loyalty program members happy, and the rewards can make all the difference. Program participants are 70% more likely to recommend a product, service or brand than the general population, a new study has found. ■ Some 55% of reward program members are self-described brand champions. In comparison, 32% of non-reward program members describe themselves as word-of-mouth advocates, according to a study by Colloquy. ■ Most people in a rewards program (68%) said they would recommend a brand within a year’s time. And those who actively participate in a program are three times more likely to be word-of-mouth advocates, the study found. ■ Of those who engage in word-of-mouth activity, 73% said they do it to share their thoughts with manufacturers, whereas 68% want to get smart about products and services.

Strategies/LOYALTY COUNTS

As customers continue to pull back on spending, marketers are working to keep the conversation going so that when spending does bounce back, the relationship will be intact.

To do this, many marketers are focusing on loyalty programs and other incentives.

There may be no better example of a company in need of keeping its customers engaged than than Citibank, whose Citi Card division is trying to strengthen customer ties.

So last month, the firm launched a gift card design contest that will let customers vote on their favorite between May 1 and May 30.

The top winner will receive 100,000 points and have his or her winning design produced on a ThankYou Network gift card in time for the holiday season. The second-place prize winner will receive 50,000 points, while third-place will get 25,000. Winners will be announced after June 18.

The ThankYou Network includes some 13 million members and lets people earn points by making purchases with their account cards and by booking qualified travel on Expedia.com. They can also earn more points by shopping through the ThankYou Network Bonus Center, which includes more than 300 brand-name online and in-store retailers.

DID YOU KNOW?

• 12% of companies planned to establish an employee incentive program this year, according to Promo’s P&I Survey.
• Nearly half of respondents reported handing out premiums at events or on tours.
• Premiums deliver better ROI (55%) compared to ad specialties (15%), the survey found.
• Of the 71% of business people who received a promotional product in the last 12 months, 34% had the item with them when surveyed, says the Promotional Products Association International.
• Of that group, 35% kept the item after two years, 22% after six months and, even better, 76% of the group recalled the advertiser’s name and 52% did business with the advertiser, the PPAI survey found.

Got an incentives tip to share? Contact Patricia Odell at [email protected]