The New Four P’s: Promoting Predictive Promotion Planning
That the variety of promotion tactics and technology has grown over the past decade should not come as a surprise to anyone, particularly the Promotion Marketing Association. If one accepts the premise that promotional devices can engage targets, two critical questions come to mind: Which activities will provide the best return on a promotion investment? How can promotion activities and budgets best be sequenced?
To respond to those questions we offer up five absolute certainties about promotional engagement:
1) “Engagement” is more than “getting attention,” “being noticed,” or “breaking through the clutter.” Coke has no problem getting noticed, after all.
2) Real “engagement” is the consequence of any marketing or communications effort that results in an increased level of “brand equity” for the brand.
3) “Brand equity” is the degree to which a brand is believed by the target audience to meet or exceed consumer expectations they hold for the category in which the brand competes. Engagement measures should, therefore, be category specific.
4) Engagement is integrally linked with loyalty and positive consumer behavior toward the promoted brand.
5) At the most basic assessment level, where engagement is realized, such promotions will engender greater attention, better brand imagery, and higher propensities to purchase/use/behave positively toward the product being promoted.
Given the lack of meaningful brand differentiation today, 70% (maybe more) of a consumer’s decision to become engaged with a brand is emotional. To have seen you, to know you, to have “experienced” you is not (necessarily) to be engaged with you.
Happily, a promotion engagement algorithm exists that identifies the top four drivers of loyalty and engagement and shows how values come together to form the component “parts” of those drivers. It also provides a calculation for determining the percentage of contribution made by any component included in the assessment. By “any” we mean that it can include specific promotion concepts and tactics being considered for use. This includes both traditional and alternative new-media options, which is particularly important in light of the rapidly evolving way consumers use, juggle, adopt, and “gate keep” old and new media.
So how do you know if a viral campaign will be more valuable than a coupon? Is “branded entertainment” more efficacious than displays at retail? Is the ability to download a coupon from an ISP contact more engaging than a mail-in promotion? Or should you beam it to a cell phone?
Well, here are two truths that promotion marketers must face up to:
1) Doing something because it is “new,” “hip,” or “rad” or because “the competitor did it” is not reason enough to actually do a promotion. This behavior is known as “field of dreams” marketing (promotion or otherwise). If you “build it,” consumers will not necessarily “come.” Just ask The Gap or Rozerem.
2) While it would be mind-bogglingly incredible for a single promotion format or tactic to act as an engagement silver bullet for all brands in a given category, this is clearly wishful thinking. What works for Target will not necessarily work for a Wal-Mart, no matter how similar the target audiences may be. Even with promotions—perhaps more notably with promotions—there is a massive difference between a market opportunity and a brand promotional strategy.
Relying on the engagement output of the various percents of contribution made by anything exposed to the consumer allows us to place specific engagement values on the promotion options—for instance, you can determine if launching a sweepstakes makes a greater contribution to engagement and profitability than buying a newspaper coupon ad. We call it the Integrated Promotion Evaluator; here’s an example.
Target consumers for a number of over-the-counter pain relievers assessed their ideal OTC pain reliever and a set of 20 promotional tools/tactics/techniques for this category. Yes, yes, for the record we acknowledge that it is likely that promotional professionals could have augmented this listing. For the purposes of this test, however, we used traditionally relied-upon techniques (and brief descriptions of the offer that had been used in the past for this category), including
• branded entertainment opportunities
• cause-related promotions
• collector devices
• cross-product offers
• extra product
• free product
• in-pack promotions
• ISP/online coupons
• Mail-in promotions
• Money-off next purchase
• Multiple-purchase offers (“buy one get one free,” or BOGOs)
• Music-event sponsorships
• On-pack money-off coupons
• Price-off coupons (newspapers/magazines/freestanding inserts)
• Self-liquidating promotions
• Sports sponsorships
• Sweepstakes
• Website interactions
• Word-of-mouth campaigns
Drivers for the OTC pain reliever category—indicating the manner in which consumers will view the category, compare offerings, and ultimately buy—are presented in their order of importance, along with the variables theat form the components of each driver, and their percent of contribution. That’s the really important part.
Click to see illustrations below:
Driver 1 Driver 2 Driver 3 Driver 4
Creativity, as we noted, certainly plays a part in both the decision process and the effectiveness equation, but with this approach it is possible to identify which of the myriad options available will provide a better return on a brand’s investment in promotional marketing and allows marketers to optimize the mix of promotions they select for their brands.
But what’s effective for one brand may not be (as) effective for another brand. Happily, the approach can configure brand-specific assessments. For example, look at the lists of the top four promotion elements for Tylenol and Advil, and note how different marketing options accrue to each of the brands (keeping in mind, of course, that this example does not take into account current brand strategic needs).
Tylenol
1) ISP/online coupons
2) Sports sponsorships
3) Extra product
4) On-pack coupon
Advil
1) Sports sponsorships
2) On-pack coupon
3) Website interactions
4) Free product
Want to be even more strategic? By understanding which of the promotional options form the components of each of the drivers, application of promotional marketing elements can be sequenced on the basis of where the brand needs reinforcement.
Suppose, for example, Brand X is seen to be strong on all but one particular driver and perceived to be weak on “safe to use.” This approach identifies five optimized promotions that will best strategically help to imbue the brand with strength—better than any of the other tactics, and no matter how desperately the client wishes to meet Simon Cowell at the “American Idol” branded entertainment planning session!
How marketers engage their target audiences has taken on new import, and this approach can provide sequences, synergies, and efficiencies that traditional promotion planning systems on their own cannot. It provides marketers with the ability to identify the best promotion for their brand, more effectively allocate budgets, and more efficiently convert targets to loyal customers.
Do that and you may get your own promotion.
Robert Passikoff, Ph.D., is founder/president of New York-based marketing firm Brand Keys and is the author of “Predicting Market Success: New Ways to Measure Customer Loyalty and Engage Consumers With Your Brand.”
Other articles by Robert Passikoff:
Self-Interest Is the Anesthetic That Dulls Innovation
Seven Brand and Marketing Trends for 2007
