Cost-effectiveness, memorability, originality – brands and distributors are always on the lookout for an innovative promotional mechanisms that can satisfy all these criteria combined. In a piece for Libre Service Actualités (a French weekly professional magazine dedicated to commerce, retail and consumption), Cyril Marchal provides a recap of the reasons why Promogaming® is a tool of choice for online sellers and large retailers.
“For a similar cost, and in addition to the image benefits, these campaigns provide greater perceived value in the eyes of the customer.”
Cyril Marchal, CEO of Lucky Cart
Initially posted on LSA magazine, please find below the English version of the expert talk “Promotional campaigns: the quest for the perfect mechanic”.
Promotional campaigns: the quest for the perfect mechanic [opinion piece]
The intensive use of price cuts and promotional codes is nothing new and has now become widespread and commonplace with the advent of e-commerce. By the end of 2014, it was estimated that one in three consumers had adopted the habit of searching for promotional codes before finalising the purchase of their online shopping basket contents. Though the vast majority of consumers have a positive view of these kinds of reductions – enabling them to save money – things are not so positive from the point of view of brands and distributors, who basically find themselves nibbling away at their profit margins in order to offer ever more attractive discounts. This often has a negative impact on the image of those brands whose products are being sold at knock-down prices.
Other promotional mechanisms exist that provide ways to avoid this perverse effect of systematic discounting whilst at the same time adding value to the image of the discounted brands, but their implementation and their cost-effectiveness do leave room for improvement. Amongst these mechanisms, the use of loyalty cards is particularly ubiquitous. Currently offered by a whole multitude of brands, these usually work by permitting the accumulation of purchase points which can then be used to obtain a discount on a future shopping basket. Unfortunately, these loyalty programmes often have the disadvantage of only offering very small reductions. The consumer therefore does not perceive the benefit until a large number of purchases have been made. It is difficult for distributors to make these kinds of promotions genuinely attractive and profit from them over the short term.
A further, alternative option is to provide the possibility of accumulating points in order to earn free gifts. An interesting but costly approach, it very often ends up being abandoned due to its ineffectiveness: lack of clarity for the consumer, point targets that seem impossible to achieve, and overly high running costs for the distributor, especially in terms of logistics.
Towards new kinds of mechanisms
There are also other, new types of solution becoming available. A case in point is Promogaming®, which offers consumers a chance (odds of 1-in-10 for example) to win their shopping basket contents rather than simply giving them a direct discount (10% off for example). What makes this approach even more interesting is that it enables small discounts to be rendered attractive. Though 2% off would probably not really interest that many people, a 1-in-50 chance of winning the contents of one’s shopping basket (which equates to a 2% chance) completely changes how the promotional message is perceived … and therefore its effectiveness.
Much better perceived value
With these new methods, brands can avoid having to drop the prices of their products. For a similar cost, and in addition to the image benefits, these campaigns provide greater perceived benefit in the eyes of the customer. The potential earnings are greater and the buying experience incomparable. And distributors, for their part, are not left out: the buying experience is enriched for their customers, they profit from the image benefits, and customer loyalty is yet further increased.
In every instance, the significant increase in the number of promotional tools reflects the needs felt by retailers. It is therefore only by constantly innovating that marketing professionals can develop efficient, effective promotional mechanisms to serve every level of the process: a never-ending quest in a society in which consumer expectations are evolving at an ever-greater speed, though this is something technology is also doing!
Who is Cyril Marchal?
Cyril Marchal (pictured), entrepreneur and founder of Lucky Cart, launched mobile games company (Zebox) immediately after graduating from France’s ESSEC Business School. Later, he joined Blizzard Entertainment (a developer of online video games) as their Brand Manager for Europe. After backpacking around the world, he settled down to work at Ubisoft, where he was initially responsible for online marketing for the EMEA zone (leading a 20-strong team) before later taking charge of managing the group’s online strategy.
What is Lucky Cart?
Lucky Cart is a French JEI-designated (Jeune Entreprise Innovante – Lit: Young Innovative Company) company and inventors of Promogaming®. This new kind of promotional mechanism enables retailers to run promotional campaigns that require the customer to make a purchase before then offering them the chance to win the reimbursement of that purchase. Around 130 retailers (including Cdiscount, PriceMinister Rakuten, The Body Shop and le Drive Intermarché) are already benefiting from Lucky Cart’s services.