The Promotional Idea Showcase - Summer 2002 - Updated Quarterly

Why Tiered Programs Work
By Cathy Cain
Does the thought of a multi-product, multi-level program make you dizzy? Rest easy – you’re not alone. Here’s how to put together a tiered promotion that will give you some serious ROI.

Ask 10 marketing pros to define “tiered promotion,” and you’ll likely get 10 different answers. One might mention a program to generate magazine subscriptions, with bonus offers for multiple-year subscribers. Another might suggest a plan to thank employees when they reach certain milestones of service. A third could describe a plan for rewarding sales reps for selling more products. 

Get the idea? A universal explanation of a tiered promotion just doesn’t exist. But for your next brainstorming session with your counselor, here’s a working definition: a promotional campaign designed to provide multiple opportunities to reach and/or reward a target audience, using a combination of promotional vehicles.

Whether your goal is to achieve safety in the workplace, customer loyalty, or an increase in sales, a promotional program incorporating a series of steps or components (or tiers, if you wish) gives you the chance to achieve greater awareness and participation than a one-shot promotion. 

More Results, Less Hassle 

Counselor Brad Milne used to develop sales promotions for automotive parts manufacturer Champion. They were traditional in nature and, he admits, not the easiest to administer. One example: Champion’s wholesalers were invited to send in a prize- redemption card each time a counterperson sold a package of truck spark plugs. But before the prize could ship, Milne had to receive copies of invoices, tabulate them and verify the prize the winner requested, which took up to six weeks. Some recipients couldn’t recall why they were receiving a prize by the time it arrived. 

Then Milne and Champion conceived of a turnkey, multi-step promotion to help launch a new truck plug. The goal was to entice counterpeople to sell Champion products quickly, leading to additional orders. The first step was a card announcing the promotion to all wholesale managers. The theme: “Work Hard, Play Hard and Win.” It was accompanied by a leather keytag. 

Once the first order had been placed (a small one, to ensure the program could begin right away), managers received an official kick-off kit. The kit included easy-to-follow instructions, a game board and a variety of promotional products — T-shirts, caps, pocketknives, flashlights and keytags. Each time a counterperson sold a truck plug, he asked his manager for a “scratch and win” card. Gratification was instant (some “try again” cards were included), but the incentive lasted; the counterpeople knew that once all the store’s cards were used, their manager would ship the game board to Champion to enter a grand prize drawing for custom cowboy boots for the entire counter staff. Additional keytags were also included in the kit as gifts for customers and installers, to increase awareness of the new product line.

“This promotion was a long time coming,” says Milne. “In the final analysis, it made much more sense than the ones we developed in the past, both administratively and from a cost standpoint. Plus, it generated 20% greater participation than Champion expected and led to our putting together another program for them for their direct sales force, which served to build additional interest and excitement about our client’s products.”

Survey Support 

Some companies survey their customers informally over the telephone (“Did we do OK with that last order?”). Others mail feedback forms along with invoices or assume that customers will contact them if they have something to say. Nordic Packaging and Press views customer input as the backbone of future marketing plans. Consequently, it sought a more dedicated approach to getting constructive criticism. This led to a multi-step promotion that most firms might only use as part of a program to sell more product. 

The promotion centered around an extensive Customer Expectation survey, presented in the form of a “citation” book titled On the Road to Excellence. The book was packaged with a high-quality pen, a letter explaining Nordic’s mission (the beginning of a “trip” to business excellence), and a return envelope. It went to 250 customers representing a broad range of sales volumes. 

As soon as customers returned their survey, their Nordic account manager scheduled a personal visit. During the meeting, the client was presented with a pencil to match the pen previously sent, imprinted with the slogan, “End of the Road.” This provided Nordic with a second opportunity to gather feedback.

To ensure Nordic employees were on board with the new direction, the company held a luncheon where each employee received a road atlas bearing the Nordic logo and campaign slogan. According to counselor Richard Hamilton, buy-in of the promotion was fast and significant: Within three weeks, Nordic achieved a 70% response. 

Stimulate, Motivate And Appreciate 

Simultaneously trying to motivate a sales staff and get your firm’s name in front of customers isn’t easy. Counselor Scott Silver helped design a program to provide sales performers with promotional products to pass along to customers and prospects. 

The headquarters office of Silver’s client, an automotive-supplies concern, purchased and warehoused a variety of promotional merchandise, including pens, mugs, water bottles, calculators, can coolers, desk planners and portfolios. Each field salesperson – a nationwide force — was presented with a “bank account” of points they could redeem for merchandise. This enabled them to stop by to see a customer/prospect with more than the typical leave-behind (a brochure). Each product “cost” a certain number of points, but the choice of how to redeem them was up to the salesperson. 

“This gave each salesperson flexibility,” explains Silver. “The same number of points could be redeemed for various products. For example, 100 pens or a $50 duffle bag. As the salespeople sold more of the company’s products, they earned more points to redeem for merchandise.” The sales staff responded favorably to having a choice of products to present, and the company was thrilled with their efforts, which ultimately led to more business. 

Chances are you’re familiar with plateau programs, which are designed to entice employees – either individually or as a team – to achieve certain goals. If your firm employs large numbers of people, you should probably invest in developing a custom program. You and your counselor can set achievement levels and select merchandise for each award tier. You can have a catalog produced (print or online) featuring the awards, purchase and warehouse the goods, set up a database and generate reports to track results. 

If you employ fewer than 300 people, your counselor can work in conjunction with an incentive house to offer a “stock” program – and, incidentally, take all the work off your already-crowded shoulders. Counselor Don Jagoda handles several such programs, with awards valued from $25 to $1,000. “You still distribute a professional-looking, printed catalog to employee participants, which will be imprinted with your company name and may come across as if you produced it yourself,” he says. “You just won’t have the option of selecting awards.” 

The time and money required to launch a stock program is negligible compared to launching your own. But that doesn’t mean you shouldn’t consider setting up a small-scale program to meet goals like reducing absenteeism or cutting costs. “There’s nothing like logod merchandise for employees,” says counselor Richard Hamilton. “It helps them develop a sense of pride.” 

Say When

It would be great if you could simply create a magic formula for developing a successful tiered promotion, but that’s impossible. Too many variables exist — budgets, the number of employees or clients you’re trying to reach and the types of products the audience will best respond to, just to name a few. 

Milne’s program succeeded because he and his client spent hours thinking about how the promotion should be administered, the effect of the instant gratification and how to keep participants motivated – as well as what products to use, of course. 

Cathy Cain is a marketing consultant and freelance writer based in Chicago.

Publicize It
It may sound silly to promote a promotion. But in some instances it’s not only appropriate, it’s also likely to increase its success. A few suggestions:
  • Give advance notice of the program to all participants. This can stir up some excitement and give the audience time to think about the awards they’ll have an opportunity to receive.
  • Establish a slogan or theme. If you envision developing programs annually, it’ll help distinguish one from the next. 
  • Produce and place promotional displays in heavily-trafficked areas, such as building entrances and cafeterias.
  • Continually remind the audience about the program while it’s underway via e-mails, faxes, paycheck stuffers, memos and voice messages.