It is essential for brands to continue building customer loyalty and rewarding their purchases
27 May 2021
With the appearance of new consumer profiles, companies have been forced to radically change their strategies.
"Encouraging and maintaining active communication with customers is a key factor, and this has been possible during the pandemic thanks to those who have decided to bring their products/services closer to their customers both physically and online."
Fran Compés, who is also a qualified Insurance Broker and Judicial Expert in insurance with 30 years of national and international activity in different Brokers of the insurance sector, has always been closely linked to the technical/commercial part of managing sales team. For the last 3 years he has been heading, together with his sales team, the office for Spain and Portugal of VCG PROMORISK, World's leading sales promotion management provider.
What is your opinion of the current situation in the promotional marketing sector?
As a result of the pandemic, we have all been affected in one way or another, but as far as the promotional marketing sector is concerned, we have seen that food establishments are being forced to adjust their commercial and marketing actions to meet the new habits and needs of the post-covid consumer.
Consumers are going out less frequently to shop and when they do, they place a lot of importance on savings, as well as looking for efficient purchases.
Now more than ever, it is essential that brands continue to build customer loyalty and reward their purchases both in-store and online, which is why promotional marketing is a great ally in these uncertain times.
As you work with major consumer brands, would you say that there have been changes in customer consumption habits?
Indeed, all the changes we are currently facing bring with them new consumer habits when it comes to planning and making purchases.
The emergence of working from home and the exponential use of e-commerce have completely changed the way we see brands and make purchases. Post-covid consumers will want to make their purchases quickly and easily, with demand for the best offers/promotions and not only in physical points of sale as evidenced by the exponential increase in online shopping.
The habits of Spaniards have changed due to the coronavirus in the use of media and leisure, as well as in the purchase of basic products both online and in person, where visits to supermarkets and hypermarkets have increased by 45%.
What other trends have emerged?
In addition to the emergence of the new consumer profile, in my opinion, the acceleration of digital transformation has been the big trend. Companies have been forced to radically change their strategies and include an online side to their businesses in order to stay afloat, and as we know this has been a big challenge.
Encouraging and maintaining active communication with customers is a key factor, and this has been possible during the pandemic thanks to those who have decided to bring their products/services closer to their customers both physically and online. In recent months we have seen that consumers have interacted with their brands online and this has allowed those brands not to lose customers.
In short, today every company should consider implementing an omnichannel strategy or what is known as blended marketing in their business in order to compete in the market.
How do you think it is possible to adapt to these new trends?
From the field of promotional marketing, I believe that, as we currently have an increase in the profile of customers looking for quality products at a good price, introducing promotional mechanisms in both physical and online stores will encourage adaptation to these new trends by providing consumers with what they need at all times and through customised experiences.
For companies, implementing this type of promotional techniques allows them to introduce a new product, boost sales and achieve greater brand awareness in the market.
You mentioned that promotional marketing brings multiple benefits for companies, but what are the favourite promotional mechanics of brands today?
We have noticed that, with the growing use of social networks, more and more companies are betting on promotional mechanics where social networks are an important element for participation, in which users must participate by carrying out various interactions from their personal profiles. Promotions that involve interactive raffles, uploading a photo of the product purchase receipt, mentions on social media, live raffles, or even contests in which influencers collaborate to obtain the prizes of the promotion.
These more digitized strategies are implemented in the most classic promotions in the world of promotions, such as Instant Win, Try Me Free, Cash back, Promotional gifts, etc. Therefore, a hybrid is emerging between classic promotions and new digital interaction strategies.
We could say that brands are increasingly betting on offering their customers an active participation and greater personalization, creating a bond with the brand in the search for more lasting relationships.
Where did the idea of implementing this type of service to cover the possible risks of promotional campaigns come from?
All precedents indicate that this service is more than 100 years old and the idea was born specifically in the USA at the beginning of the 20th century, where a lawn mower company promoted the sale telling its customers that if they were not satisfied with the product they could return it and get a refund of the expense incurred.
Since then, in the USA, this service has been an essential element for agencies and brands in their promotional campaigns and they do not launch into the market without first obtaining coverage for their financial risk.
The concept of Fixed Fee for promotions is more novel, it emerged in the UK in the 1980s and the current founding partners of VCG started working with this concept in the 1990's.
In Spain, these services are still quite new, but when our clients see the benefits they are offered, they do not hesitate to include them in their promotion budgets.
Tell us more about VCG PromoRisk. What is VCG, what do you offer to the industry?
VCG PromoRisk Ltd. was founded in the UK as a totally independent company from the association in 2004 of three professionals who together had more than 45 years of experience in FMCG promotional marketing agencies, and who specialized in the technique of secure protection of the financial risk of sales promotions, through VCG's Fixed Fee.
VCG in Spain has more than 10 years of experience, our main value being to be able to assure the companies with which we collaborate that the cost of their marketing campaigns in terms of redemption is effectively what is budgeted, turning it into an unalterable fixed fee established before the launch of the campaign, so that they do not worry about the payment of future redemptions, prizes or financial returns associated with it, since we are the ones who are responsible for the cost and payment of 100% of the redemptions, returns and prizes granted from the first to the last.
Our clients are Brands and Marketing Agencies that come to us to give us a briefing of the promotional campaign they want to develop or present to their client, looking for the security of eliminating financial risks of redemption that VCG would cover. We differentiate ourselves by being able to count on an experienced, world leading team that works closely with agency and brand clients to provide the most effective and cost-efficient solutions.
What are the advantages you offer to your clients?
Our goal at VCG PROMORISK Spain is to be able to guarantee to the companies with which we collaborate that through our Fixed Fee, the cost of their promotional marketing campaigns to be developed effectively meets the budget in terms of participation and financial expenditure, turning it into an unalterable fixed cost as part of their total budget, and established before the launch of the campaign itself. In this way, you can adjust your forecast and campaign investment figures, allowing the marketing team to live with peace of mind and not worry about the amount of future redemption costs, prizes or associated redemptions.
The fear that arises in the launch of a marketing campaign linked to a promotional mechanism (try me free, instant win, sweepstakes, discount coupons, gifts, etc.) is that the result in impact can be very good, but financially in redemption costs for the brand not so much and often promotional campaigns have been left without launching, kept in the drawer for fear of that cost. With our VCG FIXED FEE coverage our client will know the total cost before launching the campaign and will only have to analyze its impact.
This is one of the conclusions highlighted during our talk and interview with Fran Compés, Product Manager of VCG PromoRisk, with whom we addressed different aspects of the current scenario faced by companies and brands.