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Why People Buy: The Psychology Of Sales And Marketing
by Marketing Basics
Did you know that when people make a purchase, they generally buy with their emotions and then justify their decision with logic later on?
What? You didn't know that? If you truly want to succeed in business, you need to learn and understand how using psychology can set you apart from the rest of your competition and take your business to the next level.
Psychology can be applied to all aspects of your sales and marketing efforts and will give you that all important "edge" over your competitors.
When you write an ad or sales letter, seek first to understand, then to be understood. In other words, first strive to understand what's going on in the readers mind, and attempt to allay any fears or doubts.
When you do this, the reader will have the perception that you understand and care about him and he in turn will begin to care about and understand you--thus greatly increasing your chances for making the sale.
People desperately want to feel cared for and understood more than anything else, and the businesses that understand this vital pyschological factor will gain a major advantage over their competitors.
Also, when writing your marketing materials, bear in mind, people respond more to what they are going to lose than to what they are going to gain. It's called "fear of loss."
Ask yourself: What will my customers stand to lose if they do not buy my product or service?
In your sales letter, mention to your readers that it will only take a few minutes, to show them how they can benefit from what you're offering. This will mentally slow them down and partially alleviate any hesitation on their part.
In addition, reward them for taking the time to read your letter. Offer to give them a free gift. For example: free reports or gift certificates work extremely well as freebies. Why? Because they're low-cost with a perceived high value--and perception is reality. Did you know you can increase your sales by using pictures of attractive people using your product or service? It's true.
Why is this? Well, first of all, it humanizes your product or service and prospects perceive you to be more professional and trustworthy. Again, perception is reality.
Secondly, people like looking at attractive people. Big business has known this for years. Just look at how attractive those people are in magazine ads and on television commercials.
You can also use this knowledge to your advantage on your business cards, brochures and website. This is especially true for small "mom and pop" businesses. If you're reasonably attractive, always include your photo on your website and marketing materials.
The reverse also holds true. If you're not attractive, you're better off not using a picture. You risk losing customers and turning people off. The same rule applies if you're a minority. You're better off not using your picture, regardless of how attractive you are.
Why? Unfortunately, we still live in a world where people have prejudices. That's just the way it is. You don't want to lose sales because someone has a problem with your nationality or the color of your skin or the shape of your eyes. Please don't misunderstand what I'm saying. I'm not suggesting that this happens a lot--but it does happen. Why take the chance.
No matter what type of business you have, in your marketing materials you MUST sell benefits, not features. People only care about one thing, "what's in it for me?"
A feature is a characteristic of your product or service. A benefit is what that feature does for a customer. Here are a couple examples of features and benefits:
Feature: At Consolidated Bank, there's NEVER a charge for using other bank's ATMs.
Benefits: You can get cash wherever you are, when you need it, and save money.
Feature: At ABC Employment Service, we test applicants office skills, such as typing speed.
Benefits: When we send you an applicant, they meet your minimum requirements, and you don't have to waste valuable time testing them yourself.
Here's a little trick for finding the benefit within the feature. List a feature then ask yourself, "So what?" What does that feature do for my customers? For example:
Feature: Personalized service.
Benefit: The benefit of our personalized service is that we take the time to understand your needs."
Don't stop there. So what? What does working with people who take the time to understand their customers needs do for your customers?
Benefit: Since we take the time to understand your needs, we can better anticipate potential problems and save you time, money and aggravation.
Bingo! Almost everyone likes to save time and money, and less aggravation is always good, so this is a real benefit statement.
Benefits Categories:
Though benefits can be described in a million ways, there are really only five main categories:
1. Convenience: Saves time or effort.
2. Saves money or increases money.
3. Provides peace of mind.
4. Appeals to image or ego.
5. Fun or enjoyment.
In addition, one single feature can have lots of benefits to one customer. Benefit statements don't necessarily have to include one feature and one benefit, each.
Also, keep in mind, just like beauty is in the eye of the beholder, so too are benefits. One person might buy an SUV because he needs room to transport five kids; another person buys the same SUV because she likes the comfortable ride and enjoys sitting up high overlooking other cars.
Another powerful psychological strategy is using a technique that appears to lower the price of your product or service, without actually doing so.
For example, if you charge $1000 per year for your product or service, you can break it down for the reader so that they understand it's really only $19.23 per week." It's the exact same price, however, $19.23 per week is a lot easier to psychologically digest and justify than $1000.
If you would like to start utilizing the immense power of psychology immediately in all your marketing efforts, I highly recommend the following books:
"Compelling Selling: A Framework for Persuasion," by Philip R. Lund and "Secrets of Closing the Sale," by Zig Ziglar
Since they're all-time classics, you should be able to find both both books at your local bookstore or on Amazon.com. Enjoy!
FULL MODULE TITLE: Sales Promotion and Field Theatre Management
SHORT MODULE TITLE: Sales Promotion
CODE: 4MMC704
ACADEMIC CREDIT WEIGHTING:
20 Credits
SCHOOL: Westminster Business School
DEPARTMENT: Marketing and Business Strategy
WEIGHTING: 30% coursework: 70% exam
LENGTH: One semester
LEVEL: 7 Masters
MODULE LEADER: Peter Farror
EXTENSION: 3226
e.mail: farrorp@wmin.ac.uk/peter.farror@ukgateway.net
HOST COURSE: MA Marketing Communications
STATUS: Core for MA Marketing Communications
RELEVANT COURSE TITLES/
PATHWAYS: PG Certificate in Marketing/MA Marketing Management
MA Marketing Communications
SUBJECT BOARD: PG MAM
PRE/CO-REQUISITES: 4MAM706 Aspects of Marketing Management
ASSESSMENT: Weightings - 70% examination/30% coursework
SPECIAL FEATURES: Whole day dedicated workshop
ACCESS RESTRICTIONS: None
SUMMARY OF MODULE CONTENT:
This module balances a pragmatic view of sales promotion from a practitioner’s perspective with the
academic need for intellectual rigour to explore conceptual theory. This aim is attempted by utilising
the assessment processes i.e. the coursework and examination in combination to achieve a
harmony between the two divergent needs. The operational context is Austral-asian, British,
European and North American in style and subject to those regions regulatory environments. The
module content will also lean on associated subject areas where appropriate namely packaging and
presentation, personal selling and merchandising.
MODULE AIMS:
(a) To introduce students to the spectrum of sales promotion theory and practice within the
context of the UK and EU legal and voluntary codes of professional conduct.
(b) To develop students appreciation of the medium's flexibility and potential for creating and
delivering measurable marketing communications solutions at both strategic and tactical
levels.
(c) To heighten students personal and inter-personal creative and planning skills through their
active group participation in conceptualising sales promotion solutions to marketing
communication needs.
(d) To be aware of the drivers of change and their implications for teaching content and
practitioner focus.
LEARNING OUTCOMES:
On completion of this module students should be able to: -
01 Define the parameters of sales promotion activity.
02 Distinguish between the purpose and nature of strategic activity from the purpose and
nature of tactical solutions and their new inter-relationship with direct marketing and on-line
e-activities.
03 Understand the impositions of the EU/UK legislative environment and the voluntary British
Codes of Advertising and Sales Promotion Practice.
04 Apply the theories of decision making to the psychology of ‘Influencing Behaviour’ through
well targeted sales promotion and the value of gaining insights through psychographic
portraiture of defined user group life stage, life style and beliefs.
05 Comprehend the relationship of sales promotion to FMCG/FMCS when dealing with the
channels of distribution and the function and significance of personal selling.
06 Brief a sales promotion agency and use market research to evaluate the proposed
solution/s for its/their brand compatibility, the ‘value added’ contribution to brand equity and
the solution presentation for its enhancement of competitive advantage.
07 Apply the concept of ‘incremental gain’ to the planning of sales promotion and or integrated
marketing communications programmes through the objectives setting process.
08 Manage the complexities of campaign implementation, creative testing and vehicle delivery
logistics, through all their stages regardless of the disciplines and sources involved; to both
time and budget.
09 Capture appropriate feed back data to measure solution performance outcomes by their
effectiveness and efficacy sufficient to complete risk/reward and cost/income analyses as
pre determined by the plan.
10 Be aware of the powerful benefits of successfully creating and delivering solution synergy’s
when employing mixed media communications solutions.
INDICATIVE SYLLABUS CONTENT:
The module content is split into topic areas as follows:
01 Introduction to the industry, the language of sales promotion, its communication tools and
techniques, the leading agency players and their operating procedures.
02 The statutory framework of sales promotion, the voluntary operating Code of Sales
Promotion Practice, professional ethics and public opinion.
03 Promotional practices - push, scheme and tactical sales promotions, point-of- purchase
and the use of personal incentives across the business mix.
04 Promotional practices - pull, theme and strategic sales promotions, awareness, trial and
repeat purchase across the business mix.
05 Brand benefits and customer needs. Brand equity, brand integrity, brand persona, promise
and competitive advantage. Customer satisfaction and consumer loyalty.
06 Preparing the 'brief', planning and forecasting outcomes - the use of qualitative formats and
quantitative structures in solution modelling.
07 Campaign management: co-ordinating solution implementation, task and delivery timing,
deadline count down, monitoring and measuring the outcomes, analysing the risk/reward,
opportunity/cost and investment/incremental contribution.
08 The role of market research - brand beliefs and salience, consumer exploration, conceptual
development, solution pilot testing, measurement of outcomes, assessing (pre)
opportunity/cost and the (post) investment/contribution efficiency.
09 Sponsorship and mutual alliances - common goals, synergistic strategies, creating and
delivering shared values.
10 Using sales promotion to prepare and lead a mixed-media communications solution.
11 Single programme sales promotion solutions in multi-cultural and multi-statutory
environments.
Recurring Questions
1 Could price action be more effective and or efficient?
2 Is the solution compatible with the brand persona?
3 Does the solution add-value/competitive advantage?
4 Can the incremental impact be separated and evaluated?
5 Does the solution need to fit a multi-national dimension?
6 Can the solution be made to deliver synergistic benefits?
7 Are production values consistent with consumer perceptions?
8 Does promotion comply with prevailing code, law, practice?
9 Is solution compatible with both on/off-line environments?
TEACHING/LEARNING STRATEGY:
A combination of lectures, seminars and a one-day workshop will be used to communicate and
explore key theoretical concepts and practitioner vocational issues featuring case histories
analyses and team participative techniques. Guest lectures by visiting practitioners are a feature of
this module, Where appropriate inter-dependent subject areas may be drawn upon e.g. personal
selling, the packaging of goods, service presentation, in-store merchandising and POP/POS field
marketing techniques.
ASSESSMENT RATIONALE:
Assessment will be by a written closed book exam at the end of the course and by course work.
The marks will be allocated 30% to the coursework and 70% to the examination.
ASSESSMENT CRITERIA:
Coursework (30%)
This will either be a 1,500 word solo assignment to be com pleted within the teaching period which
will require students to produce a researched response or assessment, written and presented in
report style. Or a team communications project based on drafting and delivering three 500 word
reports and a supporting presentation based on a triple task: 1) a researched response to a client
brief, 2) a segmented creative solution, and 3) a message delivery programme with budget
weightings .
Examination (70%)
Three hour examination, closed book essay style, (four questions from 7, bi-lingual dictionaries
permitted) to test students ability to assess the academic theory and practitioner frameworks and
to explore subject area thinking dealt with by the module.
ASSESSMENT METHODS AND WEIGHTINGS:
Coursework 30% Examinations 70%
BOOKS FOR YOUR ATTENTION
Refer to the Module Handbook of the taught year for an up-to-date list.
Sales Promotion
Marketing Communications
Practitioner Anthologies
Useful Information
ISP, Arena House, 66-68 Pentonville Road, Islington, N1 9HS . Tel: 02 078 375 340
British Code of Advertising & Sales Promotion Practice 9th Ed 95/ISP, CAP
Official Handbook Of the ISP (Operational checklists) 1st Ed 97/ISP
International Code of Sales Promotion Practice ICC
SPCA, 2nd Floor, 47 Margaret St, London, W1N 7FD Tel: 02 075 808 225
Members Directory SPCA/99
Reference NTC Annual Pocket Books
British Shoppers, Marketing , Retail, European Marketing.
Industry Magazines
Incentive Business Monthly
Incentives Today Monthly
Promotions and Incentives Monthly
PRELIMINARY STUDY
Students wishing to read ahead of the module teaching programme will find the following texts
helpful. It is suggested that one book from A and B will be sufficient
Group A
Sales Promotion - How to Create & Implement Campaigns That Really Work 3rd Ed 02
Cummins & Mullin Kogan Page
Group B
Marketing Communications 1st Ed 00
Blythe FT Prentice Hall
Marketing Communications Classics 1st Ed 00
Fitzgerald & Arnott Business Press
DATE OF INITIAL VALIDATION:
1997
DATE OF REVALIDATION:
May 2001
05/2001 R.05/11/02
Sales Promotion
The primary objective of sales promotions are to predict and modify customer purchasing behavior, most often to improve sales. There are many ways to approach and realize this goal.
Promotion Strategy
An analysis of a product's performance takes into account both surface indications and underlying problems facing the brand. In-depth situation analyses and strategy development can help determine the incentive needed, the type of promotion likely to have the greatest appeal, and the media required to reach the desired audience.
Items to consider:
1. Customer Attitudes and Buying Behaviors
Determine who your customers are demographically and psychographically – personal characteristics, age group, location, ethnicity, income, etc. Establish what about your brand attracts themand how they make their buying decisions.
2. Brand Strategy
Consider your level of dominance in the product category. How will sales promotion factor into performance? What are the strengths and time period before returns are realized?
3. Competitive Strategy
Evaluate past performance, both yours and your competitors', and determine what activities, levels of spending and time periods produced the best results.
4. Advertising Strategy
How do you currently promote your product in your existing markets? Which media best suits your needs?
5. Trade Environment
What are your distributors' attitudes towards the brand? Your competitors'?
6. Other External Factors
What resources are available and what unpredictable factorsmay influence a product's availability or pricing (e.g.: weather, raw materials)
Promotion Tactics
The three basic elements of a sales promotion are:
The offer
Media for communicating the offer to the target audience
The creative "hook," message or theme that moves the audience toward the desired response.
Many promotion techniques are currently available and new ones are constantly evolving: In selecting a technique, a marketer must consider its suitability, compatibility with the brand's objectives, and budget parameters. Promotional tactics that Partners & Levit often recommends include:
Consumer Tactics
1. Coupons
These short-term price incentives induce consumers to purchase a product. They not only save the consumer money, but they are effective ways of introducing new products to the public, too. Thus, coupons stimulate trial and conversion, retain current users, and serve as a selling device.
2. Sweepstakes
Sweepstakes are promotions wherein winners are determined by a random drawing in some chance event. The participants exercise no control. Sweeps generate awareness and involvement with a brand. The most cost effective sweepstakes prize is travel, which has a substantially higher perceived value than its cost.
3. Sampling
Sampling allows the customer to decide for himself or herself whether or not a product satisfies a need. If the results are favorable, there are often product inventories available for purchase.
4. Mail-in offers/rebates
Mail-in offers are a delayed incentive. They appear in two general categories: Cash or coupon refunds and premium offers. Consumers purchase a product and send away in order to receive the reward.
Refund Offers require the consumer to mail in certain proofs-of-purchase in return for a set amount of cash or coupons. This encourages purchase continuity and brand trial.
Premium Offers offer free or discounted merchandise as an incentive for the customer to purchase more.
The genuine benefit to the marketer is a low redemption rate.
5. Group Promotions
There are usually three elements to group promotions: The offer, the unifying theme and joint advertising support. When participating in group promotions, overall costs are often lower. However, more time and planning must go into development. It is important to develop a logical and unifying theme, preferably one simple and to the point.
Business to Business Tactics
1. Merchandising allowances
Think of merchandising allowances as "fees for favoritism". There may be monetary or prize rewards such as travel, gifts, or discounts that are given to retail stores or wholesalers for featuring a product. In a way, you are purchasing real estate—shelf space, displays, features—for your product.
2. Contests
B-B contests are geared toward distributors, brokers, retailers, etc. For example, your company may establish a contest for its distributors. These contests help push sales along by offering personal rewards for added performance. An example of this can be seen with salespeople. The most effective sales person may win cash, prizes, or exciting trips.
3. Performance allowances (i.e. advertising allowance)
This monetary fund is set aside to subsidize the advertising initiatives of resellers. Most times, these advertisements target a local audience or smaller population. For example, Xerox may have a national advertising campaign, which includes television commercials and magazine advertisements. However, a small-town distributor may advertise Xerox machines in a weekly flyer on its own. Xerox would then reward the distributor for their efforts by offsetting a portion of the distributor's prior year's advertising costs based on the distributor's total product purchases.
4. Dealer Incentives
Getting a dealer to sell your product instead of your competitor's is difficult. Both you and your competitor may occupy the same niche and offer similar benefits. Perhaps your competitor has an edge over you, whether it be in brand popularity, pricing, or customer loyalty. Offering dealer incentives is one way to help secure your position. Rewarding the dealer with bonuses or prizes encourages them to choose your product and sell it enthusiastically.
Sales promotions are activities that shape buying patterns, attract new audiences or increase sales. It's a grab-bag of a word that encompasses everything that falls outside advertising, publicity and direct marketing, although these might be used to deliver your sales promotions.
Most textbooks see sales promotion as interfacing with price -- this writer believes sales promotions are broader than this. Too often people think discounts are synonymous with sales promotion -- not true. Sales promotions can include the provision of sampling or learning opportunities, joint promotions or collaborations with third party networks, special events, giveaways and competitions, discounts, incentives, value adding and rewards. In this section we will also look at distribution and display of promotional materials, mainly because there is nowhere else for them to go!
Imaginatively and carefully planned sales promotions can deliver long-term benefits to your organisation. Too often they are used as an afterthought to get people through the door. Not surprisingly, they usually look like last minute panic measures and that can signal failure, not success.
One well-planned, far-reaching promotion is better than heaps of little one-offs that bear no relation to your overall strategy. The work involved in developing sales promotions can often outweigh the apparent benefit -- if you measure the results in the broadest possible context, you just might find you have successfully reached people outside the inner arts circle.
As the term implies -- the ultimate goal is sales or transactions. However, promotions can be planned to increase sales over a long period within a specific market segment, so it is not always about immediate results.
Why do it?
Good sales promotions say something about your work and who you are. They can be an inexpensive way of increasing awareness, of reaching new buyers or extending the buying choices of existing audiences. As an essential part of your campaign they should be planned from the beginning. While sales promotions can often be done cheaply, there should always be a line item for this activity in your budget, no matter how small.
Because sales promotions often involve working with other organisations, they can open doors into the wider community. By building mutually beneficial relationships, you could also be paving the way for sponsorship. Remember never devalue your product. This is really easy to do if you are desperate, which is why the best sales promotions are usually planned well in advance.
Step 1 Work out what you want to achieve
What you want to achieve will be determined by the:
long-term goals of the organisation -- this might be to attract audiences from particular socio-economic groups, increase first-time attendances and so on
particular needs of a project or show -- the subject matter might be interesting to policemen or nurses, or individuals from a particular cultural background
time of the year -- Christmas, Easter, Valentines Day
programming policies -- for example, a shift in artistic direction may include more contemporary work or family shows and so on
Too often sales promotions are driven by events that are perceived as hard to sell. This is fine, provided you find the perfect audience match. But don't forget to include the more popular events in your sales promotion program, particularly if you are reaching out to new audiences.
Always ask whether a promotion is sending out the right image about your company.
Setting goals
Setting goals
Some of the goals you might set for your promotions program are:
create awareness of your company as_________ (state what this is)
reach a new target market: this might be families, non-theatre goers, older people with high discretionary incomes or building a national profile
provide an insight into a major new exhibition, book or show
build your database of potential attenders
build a profile for regular artists: dancers, singers, writers
gauge potential demand for a product, which is possible, if the promotions program is done early enough
Step 2 Analyse the benefits
When you are identifying possible sales promotions make sure that everyone involved, including the customer, benefits.
The benefits might be:
access to communications channels such as lists, clients or advertising
the 'feel good' factor the association creates for clients or customers
reinforcement of the company's image
provision of rewards to clients or audiences
stimulation from working and learning from each other
increased sales
better seats, priority booking, private viewings, cheaper prices, learning opportunities and so on
Benefits grid
Benefits grid
This is a hypothetical scenario developed to show the steps you might take in identifying the benefits (and costs) to all parties involved in mounting a promotional competition.
COMPETITION
Prize: First winning entry opened wins a picture valued at $1000 (unframed) by an emerging artist of the region and the frame of your choice from X. Winner can also choose a local school where a workshop with some of the students may be conducted by the artist.
First twenty winning entries receive a free consultation with the gallery director about buying, hanging and insuring pictures; an invitation to the private viewing and an opportunity to view local dignitary's historic collection of paintings and sculpture, many of which are by local artists.
Medium: local newspaper in a regional area
The competition: readers are asked which of the artists in the published list live locally? This list includes collections where the artist is represented and major prizes or residencies.
GOALS: Build pride in the achievement of local artists, encourage attendance at the new and emerging local artists exhibition, provide educative opportunities that will encourage people to buy art.
TARGET: Sell 80% of exhibition (past shows sold 70%) and increase average daily visitation for this annual event from 30 to 60.
The Gallery
Cost
net cost of painting
loss of commission
catering for 20 (but do this anyway)
photography of work for the prize
time: around 20 hours
out-of-pocket expenditure: $700 for a return of an anticipated 720 extra visitors and 20 more sales, generating additional net revenue of $4,000. [This simple
The local newspaper
Cost
nil
will not displace space for advertising
time: gallery to administer the entries and arrange for selection of winners
Benefits
profiles new exhibition in respected local newspaper
deepens relationship with local artistic community
forges new relationship with local dignitary
provides introductions to potential buyers
sponsorship from the local newspaper for this annual exhibition if there is a strong response
Benefits
gives value to readers
high level of local interest in the dignitary and the artist is her daughter
Editorial interest includes:
a piece about buying work provided by the gallery owner (growing interest in art as investment);
reminiscences about local artists of the past by dignitary (move to promote area as a cultural destination);
piece about the artist of the prize work (she has been commissioned to do an important piece of public art locally... it's a bit controversial) and the other artists in the exhibition.
Editorial provided -- which is good, because don't have editorial staff with the right knowledge
Gallery to:
provide the picture
administer entries
organise editorial pieces
provide photography of work
set up interesting photo opportunities for opening and winning announcement -- decides to invite Charlie the sheep shearer who is the subject of one of the works. Might make TV local news too.
Newspaper to:
provide two announcements of competition on two consecutive weeks and announce the winner, with a photograph of winner and artist
each announcement will be a minimum of 20 x 3cm columns -- these to include photograph of the work and exhibition dates
an additional half page of editorial space will be provided over a four week period
photographs to be published of the opening, if sufficiently interesting
Risks
Newspaper does not give quality coverage of art -- might backfire if it is written up badly (hence gallery is organising editorial to be written for the paper)
Photographic reproduction is poor (but the image is bold and simple, so should be okay)
Short staffed and this show takes a lot of effort (youth volunteers eager for a project to get their teeth into)
Risks
Gallery has the reputation of being a bit disorganised and overstretched -- can assign a cadet to help, if necessary
Local dignitary
Cost
light refreshments for 20 at home viewing of collection
Benefits
want to encourage locals to have more pride in artistic achievements of local artists
considering endowing collection to gallery -- want to get to know them better
daughter painted pictured offered as a prize -- want to increase her profile
Risks
Might alert burglars to value of collection -- but security is good and totally insured.
Paint framer
Cost
time and materials -- approximately $200
Benefits
want to retain leadership position by linking with a well respected gallery -- pesky competition just started up down the road
Risks
None
You have succeeded in attracting someone to an event or on a discount, now don't lose them. Keep their name and address and flag the entry on your database so you know where the person came from. Keep talking to them. Following up on sales promotions is quite challenging but rewarding.
Step 3 Design the offer
Your offer can be designed around one or a combination of the following:
Experience
Dinner with X, opportunity to be an extra on stage, observe a performance from the wings or the orchestra pit or spend a day with the conservationist.
Premium or value adding
This can be achieved through a mixture of packaging or add-on offers and might include best seats or private viewings, dinner, hotel accommodation, massage and makeover, signed copies of books or catalogues, etc.
Discount
Reducing the price of seats or admission.
All give the customer incentives to book or become a part of your organisation. Avoid the 'Wait there's more' approach; be creative and deliver your offer with style. Make sure the offer is easily understood and that it appears to be and IS genuine.
There is little evidence to suggest incentives in the form of competitions, even discounts to a range of other events, encourage arts attenders to move from maybe to yes. But incentives such as magazine subscriptions or membership of arthouse cinemas show the audience you recognise their whole life and their relationship with you becomes more meaningful
However, people who rarely attend the arts are often excited to receive an invitation to have a night or day out at a special price -- it makes them feel welcome. Well designed discounted offers targeted at new or infrequent attenders can sometimes produce spectacular results. Make sure the offer seems personal.
Packaging, premiums and discounts
Packaging, premiums and discounts
Packages can range from subscription, a concept most people are familiar with, to...
Premium packages
Dinner, parking & ticket which is sometimes called up-pricing, premium pricing or adding value to the evening. It could be as simple as including a bottle or glass of champagne, providing valet parking or an opportunity to see the exhibition when the general public is not there.
Membership schemes
Membership schemes encourage long term loyalty to an organisation and offer special prices or private rooms or exclusive events targeted at the interests and lifestyle of the membership. These schemes are becoming increasingly important to all kinds of arts organisations.
Discount packages
2fers or buy one get one free: these are best targeted at people who attend/buy infrequently. Money is rarely a deterrent to the more typical arts attender, unless they are very frequent users.
Cross artform deals: these recognise that many people are eclectic and want a range of arts experiences. It is hard to get these right and they seem to work best when packaged at one venue under a recognisable brand.
Group bookings: these encourage bulk purchase by providing a special price for groups. The ‘heart-of-gold’ group organiser is a dying breed, so companies are now making it easier to get a group together by reducing the party size from 20 to 10 or even 6.
School bookings: group packages also exist for schools. Usually the teacher is given a free pass and a ratio of pupils to teacher is often specified.
Multi-tix: special prices can be offerred to people buying three or more events in a period, for example, during a festival. This is a hybrid of the subscription concept that aims to increase transaction levels through price.
Lifestyle packages
Babysitting packages, where baby sitting services or crèches are provided, recognise the needs of mothers; families have greater pressures on their time and money and finding ways to make it easier for them to be part of your organisation will reap rewards.
Sunday brunch, afternoon tea, sunset or late night events are designed to fit in with and enhance people’s lifestyle
Youth offers like rush tickets, special prices, special drinks, themed events and other features recognise the lifestyle needs of young people interested in your work.
The sports link -- bringing in new audiences
Incentives
These can be gifts provided with the purchase of subscription or membership to an organisation e.g. key rings, fridge magnets, diaries, calendars, CDs. There is little evidence that these increase sales but they can generate loyalty and good will.
Large corporations are also looking for incentives to give to their staff or clients and arts companies are well positioned to provide these (discounts should not apply).
This is just the teeny tip of a very large iceberg.
Step 4 Identify outlets for your promotion
Distribution and display
The fliers are sitting in a nice pile in your office. Now to the real point of print, getting it into the right hands.
Distribution and display
Distribution and display
There are numerous ways to distribute your fliers, posters and promotional materials.
Inserts
You can insert your brochures or fliers into almost anything: newspapers, magazines, telephone, credit card, paper deliveries, any kind of bill (though the recipient is not necessarily in a receptive frame of mind!), shopping bags with purchases of books or CDs. These are a few ideas of what you can do if you have the connections or the money.
Cafe run
The cafe run is the Australian arts marketer's shorthand for cafes, laundromats, clubs, libraries, bookshops, record stores, other arts companies, fitness centres, health food shops, delicatessens, bottle shops, art galleries, boutique frock shops, restaurants and more. This is incredibly hard to do well. If you have a budget, there are more and more small enterprises providing these services. But they are not in every town, and not everyone can afford to pay. So, what next:
Volunteers are useful agents to distribute your material.
Keep some in your bag and drop them off or give them out wherever you are.
Develop your own systematic run. List outlets in easily understood routes, indicate good parking spots and bribe a student with tickets for the year to do it for you. Make sure they add and update your distribution list, so you don't lose their knowledge when they move on to better things. Don't forget to offer shops the occasional free tickets as a thank you.
Some street press will offer to drop off fliers on their run for a fee.
Sponsors can be very handy. Ask sponsors if they will distribute fliers to their branches, staff or clients. You might develop a special flier that connects the event more closely with the sponsor.
If you are in a region with a far flung population base, consider forging an alliance with a friendly truckie to drop off your fliers as they make deliveries of milk or bread or, alternatively, enlist enthusiastic volunteers in each town.
Other ideas to help you distribute information or your materials:
Postcards or business cards neatly folded into the bill at smart restaurants in your area.
Beer mats or up-market coasters for wine bars.
Bookmarks: bookstore chains and libraries might slip them into books, being sold or borrowed.
Overprint brown sandwich bags for sandwich bars in your area.
Fliers that are the size of business cards slipped into ticket wallets.
Collaborate with the local hotels and other arts companies to produce a postcard featuring local cultural attractions.
Hotels might also consider attaching a flier to the front of newspapers that are delivered to the room.
NEVER forget the obvious
Seat drops in your own or other's theatres.
Handing out fliers to visitors as they leave the gallery or museum.
Fliers inserted into ticket envelopes when they are mailed or when renewals go out for memberships.
Fliers or cards on tables in your restaurant, coffee bar or bookshop.
Fliers at the stage door; actors go out too, and their friends certainly do.
Don't forget the office reception area and the Box Office -- and that is pretty obvious!
Posters in the car parks used by your customers.
Displays
Window displays went out of fashion when arts marketers realised the time and effort involved didn't bring the rewards. While they do not necessarily generate sales, they can be useful in reinforcing your campaign. If your company tours a lot, forge an alliance with a building society or bank that has outlets in most of your towns; they may even design the display and distribute it around the country for you. Then there are Agricultural and Pastoral Shows, Bachelor and Spinster Balls, community events, parents teacher nights, the local barn dance, the pub. Try to be creative and add another element to the usual poster -- if balloons can sell cars, then tutus should sell ballet even better.
The Box Office and Foyer
Ever waited in a delicatessen and bought twice as much as you went in for? The same principle applies to a Box Office or gallery information desk. Tempt your customers through posters -- one off posters can be produced cheaply using digital technology, a colour printer or a colour photocopier -- a video loop, production pictures, blown up reprints of reviews, etc. Many venues, in an effort to be clean and tidy, ignore these valuable sales tools. A Coming Soon display board in your foyer or entrance can make a visit more interesting. Some theatres, cribbing the idea from restaurants, are using blackboards very effectively.
Venue signage
Exploit the venue through promotional displays of posters, flags and banners without turning it into an exercise of tasteless visual pollution.
Archive
Build pride in your organisation's achievements with a wall or hall of honour, featuring past posters, past production pictures, autographed photographs of your artists. They become part of a collective memory and are powerful. The theatre and opera director, Barrie Kosky, once said that so many arts venues have "Mr Sheen-ed away their past… the show goes, and there is no trace of it left."
Linking up with your community
Anywhere your community goes, there you should be. Make that extra effort on a Saturday morning to don the T Shirt -- usually printed up in a mad rush the day prior -- grab a bunch of fliers and talk to people. It can pay off. Try to negotiate space in the information tent of the community fair or have your flier included in the showbag. Offer the local pub a subscription to your organisation instead of the usual chook raffle. Don't laugh, it might work.
The media
Media are widely used to deliver sales promotions, usually in the form of reader offers or competitions.
Media promotions
Media promotions
Joint promotions
Most media companies have departments to organise promotions that will boost circulation, advertising sales and good will. Meet them, find out their strategic priorities and program -- these change regularly -- and see where, and if, you can be of mutual benefit.
Free tickets are often not of sufficient value for a media promotion to work for either party. Consider adding celebrity luncheons, joint education programs or linking up with other organisations such as bookstores or airlines to add value.
Keep an eye on magazines who, in this cut throat arena, are often looking for cost efficient ways to increase their profile and reach. Resourceful companies link up with similar companies across the country and with a sponsor to provide magazines with the national presence they require.
Giveaways
Giveaways fall into several categories:
filling an empty house or gallery
fulfilling a strategic goal such as reaching first time attenders
positioning your event in the marketplace or as a way to enhance media exposure
Be careful with giveaways because people won't value them as highly as tickets they've bought themselves -- there is a risk of no-shows. Brave arts marketers over-book giveaways to allow for these. Careful!
Filling or papering the house
While ticket giveaways through the media sure beat other forms of time-burning papering, these at best fill a short term need and if they are always done at the last minute, can send out negative messages about the popularity of your product.
Serving a strategic goal
Sometimes it's better to do giveaways when yours is the hot ticket in town. You'll get better coverage, more bang for your buck and you are more likely to attract new audiences (if that is a goal). Shape this as a genuine reader/station offer with a celebrity from the media attending and, perhaps, welcoming viewers, listeners or readers from the stage or podium. In return the media provides a guaranteed number of spots or insertions to promote the event. Place a sign welcoming the media's visitors in the lobby or foyer and consider giving them a welcome kit full of goodies about your program.
Always get respondents' names and addresses. You can do this through the ordering process or by giving them feedback forms or competition forms; this way you can also find out whether the promotion met your goals. Write to them after the event and invite them back to the next similar event, but maybe not at the full price just yet. It is best to wean people (particularly first-timers) onto full price gradually, giving them time to find out how much they like it.
Enhancing your media exposure
If you can't afford to advertise that tickets are on sale, craft a giveaway that will fill the first performance or the opening night of a film festival, for example. This alerts people to the opening of sales.
Positioning your event
A deal between the biggest nightclub in town, the publication they use most to promote their club and your dance company might work wonders. It should certainly implant the company into the hearts and minds of an important target for audience development. While all media promotions should help your market positioning, you can tailor them specifically for an audience subset.
Competitions
Competitions are less prevalent now in the media but you can get good mileage from these with creative ideas. Don't forget human interest competitions such as matching the baby photograph with the picture of today's ballet dancer. Competitions that involve photographs can be extremely effective; and some art galleries have arranged with the media to invite their readers to submit photographs in the style of a particular artist. The good thing about competitions is that media usually run these more than once and then again when they announce the winners.
If you are running a competition, ask entrants to send a stamped addressed envelope. This way you can send those who were unsuccessful a letter saying you are sorry they were unsuccessful on this occasion but that you have enclosed a voucher for $x to attend the event on a specified date. This works really well as a discreet promotion which will not hurt your image and it costs so little to do! All that's needed is time and the right outlet.
Networks
Tapping into outside networks can be very cost effective and help you reach hundreds or thousands of people. These might include large employers, credit card companies, travel agencies, associations such as Rotary, manufacturers of fast moving consumer goods such as milk and so on. There is a range of service organisations who communicate regularly with their members such as The Writers' Guild, Australian Music Centre, National Association of Visual Artists (NAVA), Council- run community centres and many more.
Creating networks
Creating networks
Networks are the lifeblood of many arts companies because well-chosen network programs can help you reach thousands of people at little or no cost. There has to be something in it for the networks which are usually looking for ways to reward their constituency, be they members, clients or customers. They want to provide their constituency with something different -- this might be as simple as a cheap ticket or involve a range of offers, including dinner, accommodation, an international opera tour, backstage tour, a private viewing and so on.
The more closely the network associates itself with your event, the more successful it is likely to be. This could be a Diners Club series with three private viewings a year or three dinner/performance and star talks or wine tastings a year. You have to be inventive in dreaming these up and make sure they are profitable for you.
Here are a few of the organisations you might consider for a networked promotion:
one-off themed networks that match the business and the arts event -- for example, Garden Nurseries and the film ‘Secret Garden’
quality fast food companies
education organisations or agencies -- secondary, tertiary, adult
travel agents and hotels, eco tourism, adventure tourism, cultural tourism
credit card companies
wine producers e.g. bottleneck promos
fast moving consumer goods (FMCG) eg milk cartons, cereal packages, etc.
local fitness clubs
associations -- ranging from sports and community through to girl guides and scouts
department stores
auction companies
The advantages of network marketing are it:
helps to reduce the fear of the unknown by using third parties who are familiar to the customer
can provide the equivalent of the package tour, through the provision of additional education programs that will help people learn more about the work or the artform
is cash-cheap, though the more complicated arrangements need a lot of time and effort spent on the negotiations and the quality servicing of each program
As network marketing can often introduce your organisation to an entirely new audience, make sure you provide good information and avoid ‘booking-ese’ or arts jargon. Consider producing video or CD samplers, virtual tours on the Net and so on.
Collaborating with other arts companies can be a good way to provide programs of value to larger networks who want a weightier offer, need to provide more choice or only consider programs that are available nationally.
Cultural tourism is a booming industry and it is worth meeting up with travel agents or other providers specialising in this area. Some educational programs for tourists require quality learning programs, which may require you to re-think the way you package your events. These can be extremely lucrative, not to mention rewarding.
Extending your networks
Send us your comments and feedback on the issues in this section.
In this section we provide the views of other arts marketing practitioners on particular issues. We hope you too will join the debate and add tips and some examples from your own experience that you think may be of interest. A selection of these will be posted on the site.
Extending your networks
"When I hear a kid say ‘Hey Mum there’s the gallery let’s go in’, that’s when I know we are onto something special," Frances Thomson, Director of the Perc Tucker Gallery in Townsville said. The gallery’s regular programming for children is paying off. Linking up with 'Runny Jelly', the kids festival and working with sponsor Queensland Nickel, the gallery framed and exhibited the artwork that came out of their workshops in schools. "Queensland Nickel like it because they want to do something for the families of their workers. Teachers and the parents appreciate the care we give to the work of young people." Each year the Gallery holds a dedicated children's exhibition and also an annual curated youth exhibition. The annual curated exhibition of youth work titled 'Tropologic' grew out of discussions with the Townsville City Council Youth Council. In 2001 the Gallery through a partnership with theTownsville Art Society will present a major youth art award recognising artists from the pre-school to 18 year age range. Establishing and utlising community networks is an important underlying philosophy for the Gallery which boasts 52,000 visits a year in an area with a population of around 132,000.
Frances Thomson, Director, Perc Tucker Gallery
The sports link -- bringing in a new audience
The Madison -- a cycling event that was included in the Olympic Games for the first time in Sydney -- will be held as an international event called the Super Madison in Launceston, Tasmania, a State with a strong interest in cycling. TasDance is the State’s premier dance company also based in Launceston and Artistic Director, Annie Greig has found a way for the company to be part of the Super Madison. "The Super Madison is a one day event which will be held at the Silverdome and the organisers are expecting 3,500 people to attend. We are capitalising on the presence of a large crowd and we will perform two short segments during the day. Each person who attends will receive a flier with a tear off strip giving them 25% off the price of a ticket for 'Treasured Island' -- the TasDance event in Robyn Archer's ‘Ten Days on the Island Festival’. If only 200 new people come and try out a dance performance, I will be really happy. The challenge will be to make the most of our moments on stage during the day -- the dancers will be wearing sexy cycling gear and perform pieces specifically created to work in that arena. It's called 'havin a go'. If you don't get out of your box, you don't know what might work. We are trying very hard to encourage people to be more adventurous in their choice of entertainment."
Annie Greig, Artistic Director, Tasdance.
Cultural tourism
Susan Packer, Marketing Manager of The State Opera of South Australia is in full gear for Adelaide's next big Wagner event, 'Parsifal' which will be presented in the Festival Theatre for four performances from 22 September, 2001. "The success of ‘The Ring’ in 1998 generated a major commitment from all the key players, including the South Australian Tourism Commission and Australian Major Events," Sue said.
"An economic impact study showed 'The Ring’ brought nearly 3,600 new visitors to South Australia and that their expenditure during their visit provided an economic impact to the State of around $10m, when you take into account their accommodation, food and wine, sightseeing and so on. Each person spent on average twice what a visitor to an event such as an F1 car race would spend. So this time round, we are receiving great support from tourism.
"The tourism industry's timelines are very different to those of an arts organisation. They need to know about your event years in advance, if they are to be able to sell it effectively. We started two years prior and have been proactive in developing packages so that visitors can obtain their airfare, their ticket to the opera, and their accommodation through specialist travel agents, and so on. We utilise the major tourist publications, databases and outlets as they have a greater reach than we could hope to achieve ourselves.
"We have around 7000 tickets to sell for 'Parsifal', with a top ticket price of $275. We are expecting 25% of these sales will come from visitors from interstate and overseas. In comparison, 44% of the audience for ‘The Ring’ came from interstate and 12% came from overseas, so our target for 'Parsifal' is reasonably conservative. To date [February 2000], around half the tickets have already sold.
"We developed a strategy to sell the tickets in each price range to different market segments. This means that the event is positioned differently for tourists and for the locals. For tourists the brochure sells the experience of visiting Adelaide and the State and positions Adelaide as a Wagner City, placing it on the international menu of prestigious Wagner events. For the local campaign, we are concentrating much more on the international status of the artists involved, including Jeffrey Tate who received enormous acclaim when he conducted the Adelaide Symphony Orchestra for ‘The Ring’, and who will return to conduct Parsifal.
"A fair amount of our time and money will go on making sure the visitors have a sublime time while they are in Adelaide, from the welcoming banners at the airport to the interval dinners and ancillary events surrounding the show.
"My advice to people wanting to create a cultural tourism activity is to partner yourselves with the local tourism bodies as quickly as possible and glean every bit of information you can about the market before you commit to anything. I spent a lot of time developing a relationship with the person who runs the SA Travel Centre here and she is incredibly helpful in her advice and now picks up the phone to tell me about opportunities to push 'Parsifal'.
"You also have to make sure that your product has an edge to it -- something that makes it worth travelling to see. This is the first time this epic opera will be fully-staged in Australia, so it is a landmark in Australian opera and theatre history, and we believe, it will be THE opera event in Australia in 2001."
Su Packer, Marketing Manager, State Opera South Australia
Events
An event can often be a form of sales promotion -- if it is designed to reach new audiences or is devised to encourage attendance at future events.
Using events
Using events
Performing chamber music in cabaret mode, dancing in a disused quarry, going to a mining camp, performing in a major shop window, holding an open day for tertiary students... these are great ways to reach a new audience.
Be very clear about WHY you are doing the event and measure the results accordingly. The shop window performance might be a ploy to attract media coverage, the open day might be a mechanism to increase attendances from students or to increase the number of applications for student placements and so on. Measure, measure, measure. Events are very time consuming and having a great time on the day is not enough to warrant the effort.
Free outdoor events -- a regular feature for some companies -- are often justified on the basis they are building new audiences. However, it can be extremely difficult to transform someone who attends free festive outdoor events, complete with picnic and chilled champagne, into a person who will pay money to attend an event in a more formal environment. However, some companies do these to serve the community. If this is a goal, then providing an enjoyable event to hundreds or thousands of people is enough in itself.
Establishing strategic alliances
Certain communities are large, motivated and very well organised; the gay and lesbian community for example or some ethnic communities. Work with them, their publications and invite these communities to become a part of your organisation, planning ways to produce mutual benefit. Approaches can range from artists' residencies or going to their community centres to charity appeals to discounted tickets; it depends on the needs of the particular community.
Sponsors
Sponsors can introduce you to new networks; they are also often looking for ways to provide benefits for their staff. This is an excellent way to extend your reach and attract new audiences. Sponsor receptions often bring in visitors who are new to the artform; find ways to increase their appreciation and enjoyment of the occasion, beyond providing champagne and canapés. This could be sending programs in advance or inviting the artist, curator or theatre director to talk about the production at the pre-performance reception. Even a signed poster can be a treasured memento of the occasion.
Step 5 Designing the response and the follow up
Sometimes promotions do not realise their full potential because the response mechanism is too complicated or unclear. It should be easy to respond by ticking a box, picking up the phone, handing over the coupon and so on. There is a risk in giving people too many choices, as it can take too long to work out what to do. On the other hand, customers like offers to be as flexible as possible.
Designing the response and follow up
Designing the response and follow-up
When you are designing a response for a sales promotion the prime consideration is:
Is it easy for the customer?
Other key things to remember are:
How will the seller, Box Office, security, maitre-d, front of house staff and so on recognise the customer and know what to do?
Will you be able to keep the customer’s name and address for the future?
Is it foolproof and will it reflect well on your organisation?
Meeting the above criteria can take some figuring out.
Before the days of email, the response mechanisms for special offers were often longwinded, ranging from coupons to quoting code words to showing ID or staff cards. Now it is so much simpler -- you can ask people to respond by email or give people a special password to a section of your web site where they can purchase tickets, special events or products.
When you are working with third party networks, the network (naturally) jealously guards their relationship with the customer and is usually loathe to let anyone else into the loop. By adding an additional service element -- such as posting a catalogue or a program in advance -- you can sometimes ensure you are able to communicate directly with the customer. Or, you can be more direct and negotiate with the network to give you the name and address of each person... at the very least ensure that you are able to enclose an offer such as special membership rates or give a welcome speech or presentation.
Do everything you can to ensure the customer is recognised and welcomed by communicating the arrangements in detail with each one of your front line staff.
Never lose an opportunity to talk to a customer again. Your follow up, provided it is thoughtful, will help you to forge a relationship with each customer. It’s time consuming but a short, courteous note from the CEO or Chair thanking people for their interest in your organisation makes people feel good.
For ongoing promotional programs, it is a good idea to establish an alumni atmosphere. For example, if you have a summer program where you invite secondary school students to create a work or if you hold an annual open day for tertiary students, try to keep in touch regularly and draw them into the family.
Introduction
A good definition of sales promotion would be as follows:
“An activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telemarketing, personal letters on other methods”.
More than any other element of the promotional mix, sales promotion is about “action”. It is about stimulating customers to buy a product. It is not designed to be informative – a role which advertising is much better suited to.
Sales promotion is commonly referred to as “Below the Line” promotion.
Sales promotion can be directed at:
• The ultimate consumer (a “pull strategy” encouraging purchase)
• The distribution channel (a “push strategy” encouraging the channels to stock the product). This is usually known as “selling into the trade”
Methods of sales promotion
There are many consumer sales promotional techniques available, summarised in the table below:
Price promotions
Price promotions are also commonly known as” price discounting”
These offer either (1) a discount to the normal selling price of a product, or (2) more of the product at the normal price.
Increased sales gained from price promotions are at the expense of a loss in profit – so these promotions must be used with care.
A producer must also guard against the possible negative effect of discounting on a brand’s reputation
Coupons
Coupons are another, very versatile, way of offering a discount. Consider the following examples of the use of coupons:
- On a pack to encourage repeat purchase
- In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer
- A cut-out coupon as part of an advert
- On the back of till receipts
The key objective with a coupon promotion is to maximise the redemption rate – this is the proportion of customers actually using the coupon.
One problem with coupons is that they may simply encourage customers to buy what they would have bought anyway. Another problem occurs when retailers do not hold sufficient stocks of the promoted product – causing customer disappointment.
Use of coupon promotions is, therefore, often best for new products or perhaps to encourage sales of existing products that are slowing down.
Gift with purchase
The “gift with purchase” is a very common promotional technique. It is also known as a “premium promotion” in that the customer gets something in addition to the main purchase. This type of promotion is widel
