Promotions Build Sales; There are Many Ways to Do It

Allen Potash, the great advertising and marketing guru from PepsiCo Inc., once said: “Trying to save money by stopping advertising is like trying to stop a clock to save time. It can’t be done.” The same holds true with marketing.

We know that marketing is an essential key to success in any business. We know that promotional programs build sales, market share, brand awareness, stability and great companies, yet we cannot measure all the effects of these programs just during the promotional time periods alone.

These programs will increase sales immediately, but sales will continue to grow long-term from these programs, especially when these programs are consistent.

In other food industry segments, we have long-term data and statistics on promotional marketing and advertising programs.

ADVERTISING WORKS

As an example, statistics have shown in the soft drink industry that when name brand soft drinks are promoted in grocery stores with a price-off display, sales will increase on average 30 percent to 35 percent. When combined with a display ad in a local newspaper, sales increases can be as high as 35 percent to 55 percent during the promotional periods.

I learned at a young age the power of marketing. I learned how to create and execute marketing programs from my father, a former Pepsi-Cola bottler. I also studied successful businesses throughout history and found that marketing was one of the strongest commonalties among these businesses.

I continue to successfully use the power of marketing in my own business, Cuda Coffee Co., a specialty coffee vending operation based in Spokane, Wash.

MARKETING TAKES MANY FORMS

I have marketed products through promotional sweepstakes and contests, sponsoring local and regional events, product specials, sampling programs, trial programs, advertising, and creating and executing local and national marketing events.

I have leveraged marketing programs to obtain incremental advertising exposure, including prizes and co-op offsets for marketing programs for many types of businesses in many industries.

One key is to cross promote with others to create bigger promotions and increase the total advertising.

This has included giving away everything from teddy bears to cars to Grammy award tickets complete with airfare, hotel, limousine and spending money. I have twice given away a newly constructed home.

USE YOUR IMAGINATION

Some of the more novel promotions I have done include:

  • A limited edition collector coin whereby 15,000 coins were minted and given away while tying in the sales of products with raising money for a charitable event.
  • A live cow in a grocery store sweepstakes.
  • A new car at a half time college football game.
  • Compressed t-shirts in the shape of a football bearing one of my company’s names on it.

The t-shirts were shot into the bleachers and the fan catching the one special shirt with the words “you won” received a new car.

I am presently deploying these techniques in the self-serve specialty coffee industry. This is a new niche market that has been created over the past seven years with high-end self-serve specialty coffee machines.

My past seven years of gearing up in this niche market are now paying off.

My company’s marketing programs are all inclusive, with sales of machines and products to customers throughout the country.

In addition to the many inherent benefits of our coffee machines and the great tasting drinks they produce is the ability to promote the machines and drinks with marketing and advertising programs. We have created many programs and have the ability to customize programs to ensure the success of our customers.

USE PRICING TO PROMOTE PRODUCTS

Vending machines can be set to various prices. A business may offer its customers and/or employees a special monthly low price on a particular type of coffee drink such as a latte. Each month, signage on the machine can promote a different special drink of the month.

The marketing process starts by ensuring that the end product is the best one could find anywhere. I do this by using what I consider the best machines available, my own private label brand of products, and proprietary formulas and settings.

One method of marketing the specialty coffee drinks is to execute contests in facilities where the machine is available. Our marketing team has designed numerous promotions where prizes are given away to people purchasing drinks.

TOKENS FOR PRIZES

One such program uses gold and red tokens that are received in the change given to customers using the self-serve machines in a vending mode. A customer receiving a gold coin in their change wins a prize.

The prize can be anything such as a meal at a restaurant, movie tickets, a product, or even a trip. The red tokens entitle the customers to a lesser prize or a free drink. Usually, both color tokens are used to enhance the excitement.

The costs of tokens for self-serve coffee vending machines is approximately 30 cents each. They can be used over and over.

To drive more sales, an operator may wish to discount tokens 20 percent below the average vend price. If the average vend price, for example, is $1.35 each, an operator would sell their customers tokens for $1.10.

When tokens are handed out for free drinks, customers and employees use them faster than when purchasing drinks.

END RESULT: HIGHER SALES AND PROFITS

The value to the operator is incremental sales and profits. Depending on the account, tokens can be used for all customers or reserved for “VIP” customers. They may be used to reward an employee or all employees in a department or in a company. There are many ways to use tokens to grow an operator’s business.

Sales increases vary depending on the amount and frequency of the operator’s customers giving out tokens. A car dealer may give away many more tokens than a doctor’s office.

LOCATIONS CAN PROMOTE TO THEIR CLIENTS

Tokens are another way for your customers to promote themselves to their customers or to their employees. Certain businesses can give free drink tokens to customers.

Car dealers, as an example, want their customer to feel as comfortable as possible, and nothing works better than a fresh specialty coffee drink.

Certain companies can reward employees for special performance or accomplishments.

SWEEPSTAKES AND CONTESTS WORK

Sweepstakes and contests are great ways to build sales and awareness. Consumers have long enjoyed the added value, thrill and opportunity to win contests and sweepstakes. When doing so using coin- and bill-operated coffee machines, customers can have fun trying to win prizes while buying their favorite specialty coffee drinks.

Prizes are won using color tokens. Customers or employees that receive the color tokens in their change from purchasing specialty coffee drinks can redeem them for prizes. In addition to increasing sales, this also helps to bring operators’ products to the top of their customers’ minds.

These programs also create customer loyalty. Furthermore, it makes it hard for a competitor to compete when an operator is providing so much added value and fun to their customers’ customers and employees.

The prizes can range from something that the operator’s customer sells such as a meal or product, or prizes. Operators can customize prizes to their customers’ unique needs.

The type of prizes that motorcycle shop customers may desire may differ from what video store customers’ desire. In a large promotion, a grocery store customer may win a shopping sweepstakes.

BUILD YOUR BRAND AS YOU PROMOTE

For corporate or product branding, the prizes may be t-shirts with the business name or a product logo on them. These promotions create excitement while accomplishing many goals, including new product trials, increased sales of specialty coffee drinks, increased sales of other customer products, repeat purchases, and brand awareness.

PROGRAM COSTS WILL VARY

The costs of sweepstakes and contests through vending machines can vary immensely depending on the costs or prizes. Sometimes the operator’s customer wants to promote their own products or company identity; in these cases, the operator’s customer can offset the cost of the promotion.

Increased sales can be measured, but the long-term effects of these promotions are very difficult to measure against sales during just the promotional time. It’s like trying to measure a TV or radio spot for its short-term return. What we know is that over time, it’s a must.
Sometimes marketing is simply the use of point-of-sale materials drawing people to the specialty coffee machines. Lighted signs over the top of the machines have also proven to attract attention.

POINT-OF-SALE SUPPORT IMPORTANT

To expose the promotion, point-of-sale materials are developed for window and wall posters, indoor and outdoor banners, ceiling twirlers, table tents and very importantly, signage for the top of the specialty coffee machine.

Product of the month specials do not need to cost anything extra. The drinks can sell for the same price as other drinks. If an operator wants to offer a special price when promoting a special of the month, the cost is only the discounted price of the drink.

My company’s specialty coffee machines can be set for a happy hour. During a select period of time, customers and/or employees can have the added value of free drinks. Companies can use this as an incentive for employees when certain objectives are met.

What is the cost versus the value to create product trial, to reward your better customers with a free drink now and then? To allow your customers to try your new flavors and types of drinks at no cost to them? To build customer loyalty? To add value to your customers and to stay ahead of your competitors that do not understand marketing and promotion?

Great tasting drinks bring people back for more. The more one samples, the more one sells.

SAMPLING BENEFITS THE OPERATOR

The value to an operator is to be able to conduct a sampling program without added labor. This is an area where vending operators have an inherent advantage over other retailers. For most retailers, sampling programs are expensive, costing money for extra labor, sampling tables and discounted products sold during the sampling programs.

With vending machines, it’s easy and requires no added labor. This can be done by placing the machine in a happy hour mode and placing signage around the facility to let customers and/or employees know to come and try a new coffee drink for free during the allotted time period.

New flavors can be rotated and promoted as a special offer for a limited time. Customers and employees realize that the special is of limited duration and will try more drinks while it is available.

My company markets its products to all types and sizes of business. The company is now presenting incremental profits centers and customer satisfaction programs to regional and national chain accounts throughout the country.

There is no end to developing creative marketing programs for vending machines to maximize their value for customers.

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