In the old days organizations around the world were continuously looking for ways to increase sales. Nowadays that is simply not enough. These days there is a word that sounds everywhere you go in a marketing meeting; branding. Gone is the notion that only traditional assets in bricks and mortar, patents or R&D have value. Brands are these days considered as one of a company’s more important assets. Brand Equity has become a major concern for organizations trying to stand out from the crowd in a fierce global marketplace.
According to Elliot and Percy the four major components of brand equity are brand awareness, emotional associations, brand loyalty, and financial value. I would like to analyze the use of incentive gifts to leverage these components.
According to Elliot and Percy the four major components of brand equity are brand awareness, emotional associations, brand loyalty, and financial value. I would like to analyze the use of incentive gifts to leverage these components.
People have to know a brand in order to prefer it. That sounds obvious. But gaining awareness might be costly and takes time. By offering a reward that works can help your company to increase that brand awareness. You company will possess a way to get into people’s mind differentiating its offer and adding a “tasty beautiful carrot” to its communication.
It has been agreed that monetary values of incentives are often not the critical factor in motivating customers to buy or salespeople to succeed. Instead, people are driven to live experiences and that bring us to the second point of Elliot and Percy; emotional associations.We all remember the brands that our mums used in the past. Maybe some spread they put on our toast or perhaps some smells from the soap they used to wash our clothes. We all got a positive attitude towards those brands and we are more willing to buy them against a competitor with the same objective characteristics. The reason is that “mummy’s brands” are attached to our memories and they deliver emotional associations. By giving a travel away to your customers you are offering them experiences that they will link to your brand forever.
Once you have the heart and soul of your customers, you gain their loyalty. Brand loyalty is a consequence of brand equity but also helps to build it as loyal customers are often the best ambassadors a brand can possibly have. They are happy to talk well about their favourite brand and endorse them. Strong brand loyalty leads to a reduction in marketing costs. Sustaining positive brand attitude is far less expensive than building it. Therefore, with a strong brand loyalty there is less need for promotional efforts.
If you give your customers a gift, you will gain new customers and you will also feed the loyalty of those who are already brand advocates, giving them more reasons to generate conversations about the brand and increasing the word-of-mouth. And this is, no doubt, one of the most powerful communication tool that companies have these days, but also the most difficult to get generated. Incentive gifts guaranties conversations about the brand!
Otherwise word-of-mouth, price differentiation is becoming a short time strategy that just not works anymore to sustain a business in this fast pace environment. Healthy, well-known brands with strong positive brand equity generally enjoy a good distribution; they have a highly loyal core of consumers and therefore are more attractive to the trade. Strong brands remain strong.
That is why even if your company is forced to offer discount it is highly recommended to thinks about something else, something that still can differentiate your business. A good example of this is what Chateu d’ax did with its furniture catalogue. Chateau d'Ax is the leading Italian manufacturer of upholstered furniture. They saw their sales decreasing due to the fierce competition in the market. They discounted their products as everyone else did but they observed that wasn’t just enough. Then they decided to implement Promoflight.com to their catalogue, giving their customers 2 return flights plus 2 hotel nights when buying one of their sofas on sale. The strategy boosted the sales when they first ran a TV ad announcing the deal. Chateau d’ax not only boosted its sales, but they linked the brand to leisure and travelling, helping to generate conversations with a very positive attitude towards a brand that is perceived financially strong. The TV campaign generated awareness and the incentive salient. Customers who bought a couch enjoyed a straight forward gift that improved not only the financial perception of the brand but also the loyalty of customers.
There is a reason why the technique of giving incentive presents to customers and staff in order to drive behaviour or improve performance has stood the test of time, because it works!
Author: Ivan Palma
UK Sales and Marketing Director of www.incentivegiftgroup.com
