Try-it for free!
May 14, 2011 § Leave a comment
Is this an effective tool or a waste of time?
For those who read my blog and are not familiar with this concept, a try-it for free promotional activity is aimed at activating the potential consumers by offering them the first purchase FREE. There’s no catch, it es a tool to execute sampling, COD.
It’s simple… you buy a product that has a try-it for free sticker or coupon and after filling the coupon, and sending with a proof-of-purchase and the bill to a given address, you get back a cheque or a wire transfer for the amount paid (no matter how small it was). Some bolder companies are even using internet-based couponing, so you enter your information online and you have the funds transferred into your account in no time.
For my hometown audience… “here’s a new idea”.
Which brands usually execute this ?
The brands that usually offer this Try-it-for-free coupons are breakthrough innovations. Products whose repetition rate is very high, but the trial rate is quite low (due to the high price or the disbelief that the benefits will work).
Why spend / invest resources in this type of activities?
We all marketeers & business people, know that every day we are required faster and better results with each innovation we launch. we need to assure our investors that our strategy is working and results keep Wall Street Happy. So our main motivation is short-term results = SPEED.
Nowadays, it’s almost impossible to wait for results. Results that would inevitably come because of the type of innovation, by slowly penetrating the households and by getting to new users because of the satisfaction (word-of-mouth). We are currently facing a very competitive advertising world were it’s impossible to have full consumer attention and there’s a lot of adv noise that blurs your campaigns, so typical “old-school” campaigns, are not enough.
Why we need to get to consumers faster?
My experience tells me that european marketplace is much more competitive than latin america’s. I’ve seen innovations replicated by “distribution customers” (such as mercadona) in no-time that have avoided those innovations to penetrate the distribution channel. Having the innovation overshadowed by a “private-label” similarly good, more inexpensive product. Loosing at the same time 25% of weighted distribution that this channel represents.
Brands are now looking to innovate through patents, but look back and count: how many recent innovations were protected by a patent? is it easy to obtain a patent for an “incremental” innovation? how long does it take to obtain a patent? is it worthwhile to obtain an innovation if “small changes” allow competitors to compete within the protected years?
In several of my past posts I have commented that the single most important marketing rule is being first, not on the trade, nor the shelf, but on the consumer’s mind. This calls into questioning the typical marketing strategies of FMCG, by which, you are expected to build a weighted distribution high enough to allow consumers to get the product at their local retailer, once the communication starts, but early enough to be first.
The problem: In countries like Spain, it can take 6 months for companies to gain 40% WD.
Are these Try-It-For-Free coupons effective?
As always, my answer: IT DEPENDS
- If you need a very fast penetration, you will need to ease on the requirements and it will be very expensive by communicating the promotion through a sticker on the pack.
- If you’d like to be conservative, you may use a stewardess or printed material to leverage on redemption rates and gain your results.
My experience is… After a recommendation brought by the sales director from past experiences and some short-term results required, my team executed a Try-It-For-Free promotion to help an important innovation penetrate spanish HH. As I didn’t have much experience on this promotion, and the SD was convinced it would help, we have it a try, but the results were just fairly good.
What we learned: This tool becomes more effective as the products are priced higher. With a threshold of effectiveness above 4€
Will I use it again in a product launch?
Only if the product meets the: “radical innovation”, Trial barrier, great repetition rate and a limitative price premises I have explained above.
I recently moved this blog to http://tavovalencia.com if you want to read more interesting articles, don´t forget to visit my new and improved website.
- Mobile Vouchers – The Next Billion Dollar Market? (mobhappy.com)
- Checkout Coupon Company Joins Boom in Online Discount Offers (nytimes.com)
- Coupon culture (bbc.co.uk)