We are living in a time where businesses are going through major disruptions. And guess what? Fast-Moving consumer goods (FMCG) industry is in the midst of some severe upheaval. So far, the change has not been very good for big FMCG players, who are struggling to blend in with the “new order”, but also deliver positive results to their stakeholders. However, at the same time, it seems like – smaller, regional, niche FMCG players have thrived, as the cost of entry and change in consumer preferences had tipped towards their favour. Why is that so? For one, they are more focused on the outputs (attract loyal customers, strategizing on customer promotions and hacking other additional points of growth), while others were obsessing over inputs (How do I design my business to stay relevant and conquer this new world?).
“Loyal Customers” And Customer Promotions
FMCGs and retailers are preparing for war. A war against the dubious climate of retail where the market persists to deplete market shares of the players and brands coming up with strategies to fight back with a battery of sales promotions, fine-tuned with customer insight.
These customer insights are drawn using the understanding of customer needs, behaviour, and finding out what makes them “stick”. The concepts of loyalty and satisfaction have always been an area of interest in psychology and consumer-behaviour literature.
Loyalty, as per the field of marketing, is typically a set of psychological behaviours, that includes the customer’s intent to continue the relationship with the brand, their efforts to increase the scope of this relationship and their drive to recommend the brand to others (word of mouth advertising). These behaviours lead to the formation of ‘customer beliefs’ that results in greater sales for the supplier as compared to others.
However, customer insight is of no use, without proper implementation and output (in terms of sales). In this age of austerity, brands need an extra oomph! A well-structured customer promotion marketing can help the brand stay in touch with consumers while adding more value to their offerings.
How Can FMCG Use Customer Promotions Towards Their Advantage?
We all know that promotion is one of the quintessential tools of marketing, and that remains true for FMCGs too. A store might have all the items a customer needs; however if your customers aren’t well informed all your efforts might go to vain. Promotion is a tool that not only helps FMCG companies to communicate with its prospective clients but also to attract buyer response in a stronger and quicker manner.
At the core, promotion works because it sticks to the fundamentals of human communication while keeping themselves open to the possibility of constant evolution and ever-changing mood of the business. While some might interpret promotion, as a rigid domain in the marketing mix, but in reality, a holistic and dynamic one takes within its scope of several promotional tools, such as –
- Coupons: Coca Cola was the first to launch coupon campaigns in 1887. The first set of coupons were distributed on streets, magazines and newspapers. It is a good century-old marketing tool. Since then, however, the coupon has evolved, and the digital successor seems to become a much more useful tool. FMCG can now use the digital form of coupons, called coupon/voucher codes in or on the pack of their product. The benefits of using a coupon (a marketing tool) are endless. You can not only acquire new customers but also increase sales of specific products, raise brand awareness, move out unsold inventories, reward existing customers, retain former customers, up-sell a higher margin product, increase social media engagement. As you can see the list is endless. The best part is that it is a highly measurable activity and reaps results almost immediately.
- Giveaways: FMCGs can use this kind of marketing tool to introduce a new product in the market. The product is in the form of samples. Samples give customers the chance to get acquainted, see if they like the product or try something they otherwise wouldn’t buy.
- Free trials: Many FMCGs also use the technique of free trial as bait for consumers to try a new product while eliminating risk. The product is usually something unique (like a new face product) to the marketplace that consumers are leery of trying it out. You must have seen those infomercials where buyers have only 30 days to try the product and return it if they aren’t satisfied with the product.
- Discount on Pricing: FMCGs use this strategy extensively. However, proceed with discount strategies with caution. Discounts if overused, can lead to a downward pricing spiral and eventually damage your ability to sell the product at full price. But if used judiciously like in the form of occasional discounts, seasonal discounts and discounts for reward loyal customers can also be equally effective.
- Sweepstakes: An interesting promotional marketing tool triggered to generate enthusiasm and provide incentive reactions among customers. Sweepstake entices consumers to submit free entries. Winners are chosen by lucky draw. The prizes can range anything from – stickers, t-shirts, houses, cars, and enormous cash wins. FMCGs use this tool to acquire new customers and expand its target audience. However, the only drawback is that Sweepstakes sometimes get limited to national, state, local, or other geographical boundaries.
If you want to run an effective cutomer promotions or boost sales, it is essential to remember to always brush up on your basics: which is connecting with your customer. Campaigns that draw in consumers on issues that matter to them always works better, and help FMCGs in building a meaningful kind of brand loyalty.