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Sales promotions can build customer
loyalty
Written
by Shirley Lichti for The Record, August 15, 2007
Sales promotions can be an effective part
of any marketing communication plan. Generally they feature short-term
incentives or excitement-building aspects that encourage customers
to take action. Often they are implemented with the objective of
generating trial purchase of a new product or service and use tactics
such as coupons, premiums or free samples.
Another objective of sales promotions is
to encourage repeat or multiple purchases. Unilever, for example,
has launched a year long promotion for its Dove brand in conjunction
with Shoppers Drug Mart, rewarding customers who purchase two different
Dove products with double Optimum points.
While many sales promotions are specifically
designed as short-term incentives, they can also be used to build
long-term brand loyalty and enhance customer relationships.
Fashion Shop
Debra Joseph, co-owner of the Waterloo retail store, Twice is Nice,
wanted to run a sales promotion that would reward repeat shoppers.
The consignment store receives new merchandise on an ongoing basis,
prompting Joseph to run a contest that both encouraged customers
to return regularly and served as a customer loyalty program.
She knew she had to keep it simple - not
too complicated for customers to play and easy for staff to administer.
Joseph also wanted to make it fun so she came up with a Return and
Win promotion. The concept resembles a weekly lottery with prize
money that keeps on building if there is no winner.
Customers are automatically entered whenever
they make a purchase. Since all customer receipts have unique numbers,
there's no extra work involved and it's easy to randomly pick a
winner. The number is prominently posted on a white board in the
store, allowing returning customers to conveniently check if they
have won.
The promotion started in April and will run
at least until the end of the year. To date it has had two winners,
who received $200 and $125 in gift certificates redeemable for store
merchandise.
Gift Card Prizes
National frozen food retailer, M&M Meat
Shops, recently ran a contest in conjunction with the April launch
of five new TV ads. The ads were designed to make consumers more
aware of how M&M products could simplify their lives and "save
the day" in the face of the many obstacles faced in preparing
family meals.
Pegi Klein-Webber, marketing manager at the
company's Kitchener head office, says the objective of the Saves
the Day Contest was to drive more media exposure for the new TV
campaign.
Consumers were directed to an online microsite
where they were invited to view the commercials and answer five
related multiple-choice questions. Participants correctly answering
the questions were entered in a draw to win $1,000 of M&M gift
cards.
Klein-Webber says that participants were
also asked to indicate which ad ranked as their favourite, information
which should be useful in future campaigns. For a bonus entry and
chance to win another $500 in M&M gift cards contestants could
also share their own stories about how the retailer saved their
day.
The contest, which ended on June 30, resulted
in 62 per cent of microsite visitors entering the contest and 11
per cent sharing their own stories.
Backyard Makeover
Rob Wallace, public relations and promotional events manager at
Home Hardware Stores Limited in St. Jacobs, has run numerous contests
for Canada's largest independent hardware, lumber and building materials
and furniture retailer. With more than 1,000 stores across the country,
Wallace says contests help to strengthen customer relationships
and brand loyalty.
The Ultimate Backyard Makeover was launched
in March, just before lawn and garden season. It helped to further
promote Hone Hardware's association with Mark Cullen, the company's
horticultural spokesperson. As Canada's lawn garden expert, Cullen's
photo was used in contest promotions to enhance credibility with
consumers.
A campaign for the contest included point
of purchase materials and ballot boxes in every store across Canada,
a tag at the end of television commercials, and a promotional piece
in flyers and catalogues. Online media was also purchased to promote
the contest.
Customers could fill out ballots or enter
online at www.homehardware.ca.
This drove traffic to stores as well as to the newly designed website
where entrants were encouraged to sign up for e-communications.
The contest, which offered over $50,000 in
prizes including $5,000 Home Hardware Gift Cards, Broil King propane
barbecues and autographed copies of Mark Cullen's the New Greener
Thumb gardening book, generated about 500,000 entries.
Meet Regulations
Before you launch a contest, you'll
want to ensure you abide by regulations stipulated in the Competition
Act. An information bulletin posted on the Competition
Bureau website will help you get started.
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