Feature: Experiencing higher redemptions

As experiential marketing continues to make news as a marketing discipline, people finally seemed to have moved on from the debate over what it actually is, and instead are thinking about how it can work for them. One question that does still arise is how ROI can be monitored, and most good experiential agencies will apply a bespoke facility to each individual campaign.

Many initial thoughts of experiential campaigns will conjure up images of grand structures in supermarket car-parks, and by the nature of being as close to point of sale as possible, this is often true for certain brands. These types of campaigns will often involve some form of sampling and/or coupons, and this can give a good idea of effectiveness and redemption rates. If you want to ask about how redemption rates are affected by different scenarios, who better to speak to than the fixed fee agents?

Distance to POS

Due to the nature of experiential activity it is often conducted in the field and reducing the distance to point of sale, meaning navigation for the consumer to purchase is far easier. Chris Baldwin, Account Director Mando Brand Assurance agrees: “If we start to introduce experiential activity to the campaign, the distance between the sight of the offer and acting on it can narrow or even become non-existent. Sampling, for example, can put the coupon in the consumer’s hand only inches away from the product itself. Field teams will have more time to engage the consumer allowing a deeper understanding of the redemption route.

“Even the humble leaflet, often such an unattractive redemption tool, can become a powerful medium if that leaflet is handed to the audience as part of a brand experience. One campaign we did recently used field teams to offer leaflets to consumers in a supermarket environment. It produced redemption levels 400% higher than we would normally expect from a leaflet communication and was a great success for the client.”

The value of the experience

Linda Wise, New Business Development Manager at Umbrella Risk Management gives an insight into the different considerations taken into account to cover an experiential promotion: “We view experiential marketing completely different to the standard on-pack promotion, and by experiential marketing I do not mean sampling at the end of aisle. A really good campaign will immerse the consumer completely into the brand.”

In order to calculate the risk, some of the questions asked by Umbrella are:

1. A description of the experience
2. The location of the experience
3. The target consumer
4. The scale of the experience
5. How many brand ambassadors are there and how will they be utilised
6. Will staff be in branded
7. Will consumers be able to sample product immediately
8. What is the incentive to purchase
9. What is the distance from the experience to the point of purchase
10. Will there be data capture for future campaigns

Good Brand Ambassadors

Another factor that can have a major effect on the redemption rate is the quality of the brand ambassadors working on the campaign. The interaction between the ambassadors and consumers is all important and the level of experience can often depend on this. We asked Brian Gibb of VCG for an example: “We ran dozens of coupon risks through 2006. You have to be very careful if there is any experiential element as the redemption rate can be influenced by the quality and personality of the experiential teams in ‘driving’ the consumer to the fixture. For instance, we recently covered the financial liability for a coupon off a new product for Aunt Bessie. It was a 30p MONP off £1.99 for a new ‘Ready To Bake’ product. Generally, we would assess likely participation rates on a coupon off any product from the deep-freeze section going in low single percentage redemptions. In this case, the product was well-researched. The client had a good team of promotions people sampling the baked product, so we factored in slight upgrade and settled on a fixed fee based on 4%. The team obviously did a good job on the sampling (and perhaps directing consumers to the relevant fixture) as it had a final redemption figure more than four times in excess of this figure. A real lesson on the effect of experiential sampling.”

You can’t just give a consumer an experience and expect to see an increase in redemption rates; it is the level of that experience that makes the difference. Stephen Berry, Account Director at Fotorama explains: “It is fair to say, that during a sampling campaign, most, if not all of the sample coupons will be distributed. However, what really makes a difference on how fixed fee calculations are determined is whether the consumer is inspired enough to track down that product and buy it. For example, which coupon is a consumer more likely to redeem? One that is simply handed to them in the street without word or explanation or one that is handed to them after they have engaged with a brand representative, discussed the product and/or tried it first hand and generally made to feel personally linked to the brand?”

Berry continues: “How well an experiential campaign is designed or executed can greatly affect its success and, more importantly, how a fixed fee company will cost the sampling element too. It has to be more than a link to the brand’s profile or even its consumer profile.”

The figures:

Mark Kimber of PIMS SCA explains what the difference can be in percentage terms: “Initial expectations of redemption rates for sampling and coupon activity would be between 5% and 40%, depending on other variables and the mechanic of the activity. Our experience suggests that overall responses are higher when a coupon is attached to a sampling activity.”

If sampling takes place in store, distributing coupons in close proximity to the product means that people are more likely to redeem than if distribution was on the High Street in which case the customer has to make an effort to find a store selling the product, find the product and remember their voucher. For example, we would expect a coupon offering 20% off the recommended selling price of a product, distributed outside a store selling the product, to be 35%. Whereas the same offer distributed on the High Street could expect a 10% redemption rate.

Umbrella also estimates that a similar increase can be expected if an experiential marketing campaign ticks all the boxes. They would expect no less than a 10%-20% increase in redemptions.