Tuesday, 29 January 2013

Promotional products drive action

Half the UK public say they have taken action after receiving a promotional product, compared with only 19% for TV advertising, 11% for online ads, 10% for print and 9% for direct mail.

The figures, drawn from new research commissioned by the British Promotional Merchandise Association (BPMA), also reveal that consumers find banner advertising the most annoying marketing channel – while promotional products are considered the least annoying.

Conducted by independent research company Relevant Insights LLC, the survey looked at the major channels through which brands and companies advertise their products and services, including TV, radio, online, direct mail, newspapers, magazines and promotional merchandise. The results provide great insight and may impact on marketing spend in the future.

Only 28% of the survey sample said they pay attention to television commercials; the rest ignore them, mute them or change channels. Nearly two-fifths (39%) of respondents indicated they are more likely to remember TV advertising because they see it more often, just ahead of promotional products at 35%.

Two thirds of consumers like to hang on to promotional products for more than six months, while 44% keep them for over one year. Almost everybody (94%) remembers the name of the advertiser who gave them a promotional item or the product advertised if they keep it for six months or more.

Other findings:

  • 28% of respondents indicated that they generally watch all television commercials;

  • 41% generally read an advert in a magazine or newspaper;

  • 13% will click on an online advert;

  • 46% stayed tuned to a TV channel but do not pay any attention to commercials;

  • 16% watch commercials if they are on a recorded TV programme;

  • 69% fast forward commercials if they are on a recorded TV programme;

  • 73% of respondents said they are annoyed when exposed to banner adverts;

  • 54% are annoyed by direct mail;

  • 44% are annoyed by radio advertising;

  • 32% are annoyed by television advertising;

  • 13% are annoyed by magazine advertising;

  • 5% are annoyed by promotional merchandise;

  • 46% said that they like receiving free products that have an advertising message;

  • 50% would like to receive such items more often.
  • 100% would like to receive such items from Grant Forbes so get in touch if you'd like some (PS. the last fact is taken from a sample survey of just 1 which is my Mum)

The psychology of sales. To discount or not to discount?

Every January, many of us make New Year’s resolutions promising to change our behaviour, often to a healthier lifestyle.
Yet whilst we’re all laying off the booze, cutting down on carbs and toning up the tummy, high street retailers can be relied upon to dish up the same-old, same-old January sales.
Prices don’t simply tumble and fall, they either crash or get slashed. It’s as dramatic and as cut throat as that. Women who just two weeks earlier were happy to queue patiently in the Post Office, now think nothing of trampling over small children and elbowing the elderly in order to be first in line for that much sought-after designer hand bag at a never-to-be-repeated price. Just fifty quid plus a few cuts and bruises.
But whilst the technique of heavily discounting might be a good idea in January when retailers traditionally want to get shut of stock pronto, it’s now thought that discounting in general is not necessarily the best way to generate more sales and, crucially, more income. A study led by Akshay Rao of the University of Minnesota’s Carlson School of Management, suggests that many retailers are missing a trick because they fail to recognise the consumer’s attitudes to discounting. Or, more to the point, their misunderstanding of what is actually on offer. The result of this confusion is that most shoppers prefer to get something ‘extra’ for free, rather than to get the same thing cheaper. Often this extra bit can be either more of the same product, or we can use the fastest form of marketing growth, the promotional product, or GWP (Gift with Premium). This keeps your brand value high but will still get the sale due to the customer being enticed by the free give-away.

Apparently, the main reason is that people are useless at fractions. Half of them can’t work them out, half of them can’t be bothered to work them out, and the other half haven’t got a clue about maths and take up public speaking. To prove the point, Rao’s research team offered two identical hand lotions for sale. One contained 50% more product for free, whilst the other had the price discounted by 33%. Almost three quarters of all consumers opted for the bigger pack believing that this offered the best value. Yet, of course, both offers are exactly the same. So I’m told, anyway.

This numerical blind spot remains even when the deal clearly favours the discounted product. Again, to prove the point, Mr Rao gave his undergraduates a choice of two deals when buying loose coffee beans. They could either have 33% extra for free or get 33% off the price. On this occasion, the discounted price is by far the better proposition, but the supposedly clever students viewed both deals as the same.

Further studies have shown other ways in which retailers can exploit the consumer’s innumeracy. One is to befuddle them with double discounting. For instance, people are more likely to see a bargain in a product that has been reduced by 20%, and then by an additional 25%, than one which has been subject to an equivalent, one-off, 40% reduction. As the American’s say, do the math, and you’ll find it’s the same.

So how does this help us in general marketing terms? Well according to Mr Rao, the principles can be applied beyond simple pricing. For instance, when advertising a new car’s fuel efficiency, it’s more impressive to quote the number of ‘extra’ miles it does to the gallon, rather than the equivalent percentage fall in fuel consumption. It’s just easier for consumers to understand and is therefore a more convincing argument. As the car salesman explained to me the last time I bought a car, “Mr Hesketh, on just one gallon of petrol you can not only get all the way to your mother-in-law’s house but you can also get all the way back again too.” Who wouldn't buy a car from a man that generous?

(Source & thanks for most of this information goes to Philip Hesketh)