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December, 2010

On-pack promotions push are the granddaddies of promotional mechanics, but they can reap rewards for you? Brand owners need to have a well thought out plan before pushing the green go button. They can be costly but choosing the right method can bring a good return on your investment. Try not to think of the cost of the promotion per unit price but instead look at the projected increase on revenue. Try to think of the long term brand reinforcement also and think of the potential brand loyalty that running a cleverly positioned on-pack promotion could bring along with it. Here are some tips for brand owners and manufacturers when thinking about running an on-pack promotion:

DO think out the following before agreeing and finalizing your campaign:

• What is an on-pack promotion? It is any offer that is communicated on the product pack itself.
  
• Why run the on-pack promotion?
  
• What are the objectives?
  
• What do you hope to achieve?
  
• What has been done in the past? How successful was it and what should you do again?
  
• What should you avoid this time to ensure the promotion is sucessful?
  
• What are the main objectives? To encourage purchase; but it can also be geared to creating brand loyalty, collecting customer data and communicating brand image.
  
• What are examples of good on-pack promotions and results?
  
• Think about what you want to achieve from the on-pack promotion?
  
• Do you want more sales? Short term sales? Brand loyalty? Repeat purchase?
  
• Do you want to raise your profile?
  
• Data Collection? If so, what will you do with it once you have it?
  
• Is your brand well positioned to run a successful on-pack promotion that will be attractive to consumers and create the desired effects?
  
• What type of on-pack promotion should you go for?
  
• Inserts, coupons, SMS text to win, data collection?

"These promotions are popular with FMCG brands because the marketplace is so competitive.”

What are the pitfalls? You must ensure that the offer, reward and prize are appealing to the audience and are ‘of-the-moment’. i.e football themed if people are thinking about the World Cup.

Ensure redemption levels are accounted for either via promotional insurance or fixed-fee promotions to make sure the budget is controlled.

DON’T:

• Don't make the promotion too wordy, complicated or confusing, and don't ask for too much information from consumers, or they won't participate.
  
• Don’t just go with a plain that has not been fully thought through. A third party with experience in running campaigns and a good track record may cost extra and eat at your margins but if the campaign is not well placed and not targeted enough your sales will suffer and may just end up disappointed. Also look into insuring or risk managing promotions.
• How long do you need to plan an on-pack push? This will depend on where the pack is sold and the company's own restrictions. Product packaging and retailer demands can mean a lead time of nine months or more. More flexible companies can get this down to three months.
• Don’t forget to add an expiry date and include details of terms and conditions – if not enough space on-pack, why not prompt for a multi-page label. You may not want to include all terms and conditions – directing consumers to a web page is also a suitable option.
• Don’t forget that packaging cannot easily be changed overnight. Be aware of client approval practices.
• Don’t just rely on one vehicle to deliver your message. To highlight your campaign, why not add an in-store awareness campaign highlighting your on-pack promotion. This can be a simple banner, POP material etc.
  

Questions to ask:

Q: How should you choose the prize/incentive/premium? Look for a balance between brand objectives, brand fit and budget. The prize should reflect the aspirations of the target audience.

Q: How much does it cost? Everything depends on budget, the number of packs involved, the likely number of redemptions, the form of mechanic used and the product.  

Q: How can you avoid problems with miscalculating the redemption rates?

If you don't have experience, it's essential to use an agency with a track record of running on-pack promotions.

Q: How can you be creative with the traditional on-pack mechanic? Push boundaries, think laterally and dare to be different. Many traditional mechanics have been re-invigorated via a clever creative twist.

THE LEGALS TIPS TO NOTE

• Don't forget data protection laws. Make sure you give the required disclosures. Check your notification with the Information Commission covers you
• If collection and use of customer data is not 100 per cent in-house, ensure outsourcing arrangements are covered by a written contract. Make clear who can do what with the data and who is responsible for data law compliance
• If the promotion uses a famous personality or character, make sure all appropriate licensing agreements are in place
• Ensure all promotion terms are on the pack, clearly drafted, legalese-free and legible
• If more than one purchase is necessary, make this clear.
• If the promotion offers a mail order or online purchase, check legal disclosure obligations and consumer cancellation rights under "distance selling regulations, plus requirements introduced in August 2002 by the Electronic Commerce (EC Directive) Regulations 2002
• Ensure contracts with suppliers of any product involved are in place and cover all relevant areas.