From Sales Promotions To Sales Promoters

FUTURELABFromSales PromotionsToSales promoters Bucharest, September 2011

Hi I’m Alain @FLB_Alainthyswww.futurelab.net FUTURELAB

This will be a slightly different presentationI’m going to advocate a new perspective on sales promotions3. FUTURELAB

FUTURELABFromSales PromotionsToSales promoters

Stepping back a momentBut before we go there, let’s take a 10 minute detour5. FUTURELAB

Let us start with a few questions:Why do the space shuttle engines have the diameter they have?6. FUTURELAB

Let us start with a few questions:OK, that’s pragmatic, but why is the tunnel that width?7. FUTURELAB

Let us start with a few questions: That makes sense, but who decided on the width of tracks?8. FUTURELAB

Let us start with a few questions:Remarkable, but why choose this base for trams?9. FUTURELAB

Let us start with a few questions: OK, but then why make the axes this wide?10. FUTURELAB

Let us start with a few questions: So if the ruts lead to the cart, what caused the ruts?11. FUTURELAB

Let us start with a few questions: Standardised imperial chariots? Where did Ceasar get that idea?12. FUTURELAB

Let us start with a few questions: OK, but some Egyptian must have had an original idea! 2000 B.C.13. FUTURELAB

Let us start with a few questions: And so we find the answer: it’s all because of a horse’s ass. 2x14. FUTURELAB

Orthodoxies drive our behaviour We copy and build on what we know to work15. FUTURELAB

Orthodoxies drive our behaviour In fact, it’s in our genes ... behaviour ...HUMANS ... ways of working ... COPY ... processes .... ... organisational structures ...16. FUTURELAB

Orthodoxies drive our behaviour It is the secret to human success and achievement Reading and print Industrial progress Agriculture Apps17. FUTURELAB

Orthodoxies drive our behaviour But they can create orthodoxies that close our mind • We’ve always done it that way • This is “best practice” • That’s what everyone does • Our world-view is right18. FUTURELAB

Orthodoxies can “lock in” behaviour If they get too strong, they may be difficult to change19. FUTURELAB

Orthodoxies can “lock in” behaviour School holidaysImage: (cc) State Records NSW 20. FUTURELAB

Now wait a minute …Wasn’t this aconference aboutmarketing andsales promotions? FUTURELAB

Well, here is my point Many marketing practices are driven by orthodoxy and lock-in22. FUTURELAB

FUTURELAB Marketing is full of orthodoxies Question: Where did the 30 second spot come from? FUTURELAB We will continue with this programme after these important messages. FUTURELAB

FUTURELAB FUTURELAB Orthodoxy alert Pat Weaver & Leonard Lavin FUTURELAB

FUTURELABLock-in AlertWe keep doing the 30 seconds, while the reasons disappeared FUTURELAB

FUTURELABMarketing is full of orthodoxies?Where do banner adverts come from FUTURELAB

FUTURELABLock-in alertWe keep doing them, while hardly anyone is watching 78% of consumers consider in-stream advertising as “intrusive”. Half of viewers stop watching an online video once they encounter an in-stream ad. Source: Burstmedia, January 2008 29% of consumers leave a website that appears to be cluttered with advertising. 52% do not tolerate more than 2 ads per page. Source: Burstmedia, December 2008 Only 13% of UK consumers pay attention BANNER/AD BLINDNESS to ads on social networking sites. Source: Ebay Advertising, March 2009 FUTURELAB

FUTURELABSales PromotionsWhy do we do many sales promotions?Keep thefactoryrunning(at all cost) FUTURELAB

FUTURELABSales PromotionsBut today there is much more flexibility Lean supply chains Outsourcing FUTURELAB

FUTURELABSales PromotionsIn which many sales promotions defeat their purpose % of US sales % of POP materials are never promotions which used or used incorrectly. are unprofitable “the net impact of deeper discount activity is almost 85% invariably to decrease ROI even if cash returns are increased” 40-50% Billetts, Warc Online, 2009 UCLA, 2004 Advertising Promotion and Other Aspects of Integrated Marketing Communications, 2008 FUTURELAB

FUTURELABSales PromotionsWhile they may attract customers today, they don’t build loyalty If they come to you for price, they will leave you for price. *note: the same applies to gifts, freebies, etc. FUTURELAB

FUTURELABLock-in alertAnd may even pose a reputation risk for your brand Trade your reputation for a short term sales fix? A 2011 study by John Byers and Georgia Zervas from Boston University and Michael Mitzenmacher from Harvard University reviewing 56,000 yelp reviews of 2332 merchants offering 2496 Groupon deals FUTURELAB

FUTURELABMy caseStart focusing at least 25% of your efforts on sales promoters Keep doing “smart” sales promotions, but start shifting your attention. FUTURELAB

FUTURELABMy caseSales promoters are so happy, they actively promote you FUTURELAB

FUTURELABThe sales promoterAn illustration of the impact sales promoters can have Video http://youtu.be/b0OeM6UUAoI FUTURELAB

FUTURELABThe sales promoterAn illustration of the impact sales promoters can have “I’ll have what she’s having” Sales promoters get others to buy your product FUTURELAB

FUTURELABThe sales promoterBut there is more beyond advocacy Customers that are so happy they are likely to recommend a company spend more negotiate less stay longer as customers are more open to upselling are easier to service upgrade quicker are ready to refer to others increase staff morale etc. FUTURELAB

The sales promoterHow likely are you to recommend? Detractors: Dislike Passives: Satisfaction Promoters: Delighted 0 1 2 3 4 5 6 7 8 9 10 FUTURELAB

The sales promoterCase: an automotive brand € 15,000 Detractor Promoter - € 1,500 FUTURELAB

The sales promoterCase: UK FMCG Leading by recommendation, July 2010 120 Brands – 4000 consumers TOP 5 Most actively recommended FMCG brands in the UK “55% of FMCG consumers Activia 76,9% Kellogs Special K 76,0% had made at least one Innocent 74,2% recommendation” Lucozade 72,7% Red Bull 72,2% A 7% increase in NPS = 1% increase in FMCG Growth FUTURELAB

The sales promoter Case: UK FMCG Average revenue impact (own expenditure + recommendation) Promoter: + $ 208 Detractor: + $136 Differential: +53% Image: (cc) Joe ShlabotnikSource: http://www.futurelab.net/blogs/marketing-strategy-innovation/2009/04/the_net_promoter_score_and_the.html FUTURELAB

The sales promoter Case: Allianz InsurancesPromoters defect less Promoters buy more Promoters drive businessIndexed average gross Indexed average of newly Indexed average new GPVpremium volume cancelled per concluded gross premium generated throughcustomer per year volume per customer per year recommendation per customer Promoter Detractor 100 100 83 Detractor - 100 Promoter - 271 -200 Promoter Detractor FUTURELAB

Likelihood to Repurchase (B2B-markets) Share of Wallet (B2B-markets) “delighted customers are 5x more likely to “at the point of delight, there is an exponential (recommend) repurchase” increase in the share of wallet”Being blunt about it … you’d make (a lot) more moneyAlso in B2B MarketsSource: http://www.ipsos-ideas.com/library/dl.cfm?pdf=IpsosLoyalty_WP_Delight.pdf

The sales promoterCase: Growth correlation FUTURELAB

The sales promoterIn summary Creating and activating sales promoters is one of the most profitable type of sales promotion you can pursue. FUTURELAB

FUTURELABThe sales promoterHow can you turn your customers into active sales promoters? FUTURELAB

Mmmhhh … I’d like some of that … I just have to tell you about Alain…Let’s stay “in theme” with a case studySay I seek sales promoters for my skills as a lover.

Which would be the most effective method To turn you into a sales promoter for my skills as lover.Direct Sales? Advertising? Sales Promotion? Recommend a friend & get e-coupon www. greatlover 60 Minutes Extra .com This voucher cannot be combined with other promotions. Hi, I’m a great lover. Tell them he’s a 2-for-1 Promo Bring a friend & collect Would you mind great lover!! double loyalty points to telling your friends? get those wine glasses! FUTURELAB

The only thing that could work is to provideAn experience that sweeps you off your feet?

FUTURELABAsk yourselfAre you a one night brand? Or do you want a relationship? FUTURELAB

FUTURELABMany brands are or have already moved thereMore and more brands are taking the latter direction Massive investment in customer facing staff with as goal to create super-promoters Global roll-out programme for creating (sales) promoters for their business. (Case: Romania, acts of kindness) Global change programme to focus the organisation on creating (sales) promoters. Orange Business Services - Zappos – KLM – Virgin - P&G - Carglass - … FUTURELAB

FUTURELABMy recommendationStart considering it too • Shift 10-25% of your sales promotion budget into “promoter creation”. Sales Promotions • Run the business case to calculate the value of a sales promoter for your business to justify this action. • Launch initiatives aimed at your existing customer base to WOW them into sales Sales Promoters promotership. • Give people who are already sales promoters tools and support mechanisms to convert their friends and family. FUTURELAB

FUTURELABIn other words MAKE MORE MONEY MAKE THE WORLD A MORE CUSTOMER FRIENDLY PLACE FUTURELAB

Thank you @FLB_AlainthysIf you want to be morecustomer-centric, get in touchvia www.futurelab.net www.amazon.com FUTURELAB

http://michaelbatistich.com	135
http://www.futurelab.net	107
http://paper.li	5
http://michaelbatistich.tumblr.com	4
http://www.brijj.com	2

From Sales Promotions To Sales Promoters

by Futurelab on Dec 13, 2011

Accessibility

Categories

Tags

Upload Details

Usage Rights

5 Embeds 253

Statistics

From Sales Promotions To Sales Promoters — Presentation Transcript