Fixed Fees & Guaranteed Results

Fixed Fees & Guaranteed Results

A new approach to product sampling in the FMCG category.

A new approach to product sampling

This paper describes a new approach to FMCG product sampling: less expensive, instant, campaigns with local or national coverage, precise targeting, fixed fees and guaranteed results.

PayPoint, one of the UK’s leading local payment networks, and i-movo, market-leading providers of Digital Voucher services, have come up with an innovative method of providing product sampling campaigns using existing technology in retailers across the UK, and the one thing most people remember to take with them when they leave home along with their wallet and keys: their mobile phone.

With marketers increasingly focused on delivering value-for-money on all activities they undertake, this new proposition works on a fixed-fee, guaranteed result basis, such that the return-on-investment can be calculated before the activity starts.

The pricing model is flexible and can be used across any number of stores at any level of consumer engagement, and all financial risks are managed without the need for the safety-net of promotional insurance. The net result is a distribution cost-per-sample which is 30% to 50% lower for large volume campaigns and between 50% and 70% less for “brand-to-hand” campaigns.

Traditional approaches

While product sampling is established as an effective technique of encouraging your target consumers to experience a brand, the simple act of distributing a product sample to a consumer can be expensive with the costs often exceeding the retail value of the sample. Moreover, the labour-intensive nature of traditional sampling techniques means it can usually only be managed at a small number of locations at any one time.

In addition, the quality of consumer data collected during sampling is often difficult to verify and distribution policies such as ensuring that only consumers of a qualifying profile receive only a single sample are difficult to enforce.

Campaign activation & management

The process developed by PayPoint and i-movo is as follows:

1. The brand selects a target consumer demographic according to any combination of the following variables implicit to a PayPoint transaction:

  • Region (electricity region or post-code area)
  • Retailer group (e.g. all Martin McColl locations)
  • Value (e.g. all transactions under £10)
  • Transaction Type (e.g. pre-payment energy, bill payments, TV licence, mobile airtime TopUp)

For instance, to engage with a young, urban audience in the North West, low-value mobile phone top-up transactions in Manchester could be selected.

2. The transaction receipt includes a reference number and is evidence of payment. Consequently, the receipt is both read and retained. The consumer call-to-action is printed on their PayPoint receipt and takes the form of a logo and an invitation to send a text message to receive a digital voucher for the promoted product. The consumers sends a keyword to a shortcode and receives an i-movo voucher back by return. Using purely digital media, there is no requirement for point-of-sale displays to be set up at the start of the campaign or removed after it closes.

3. Alert retailers of an upcoming sampling campaign using the end-of-day receipts produced by the PayPoint terminal for seven days. These receipts detail to the retailer the cash collected and commission earned so they are examined daily.

4. Once live, the i-movo system applies campaign rules to each voucher request. For example, each consumer might be entitled to three vouchers but not more than once per day. For each valid voucher request, the i-movo system sends the consumer a text message containing a unique code.

5. The consumer takes the voucher message and the promoted product to the cashier who validates the code using the PayPoint terminal, the i-movo system then ensures that voucher number cannot be used again and the consumer leaves with the product.

6. The retailer is automatically paid the full value of the voucher within six days via their existing relationship with PayPoint. No other action is required on their part

In addition, if the retailer has an Electronic Point-of-Sale (EPoS) system capable of scanning barcodes the PayPoint receipt produced on successful validation of a voucher can show a barcode, which can be scanned to automatically apply the correct discount.

Also, using the mobile phone as the means of participation provides an extra benefit in that the mobile numbers harvested can, subject to industry best practice, be used subsequently for future campaigns, feedback requests or providing other information. Lastly, using digital vouchers means a brand manager can see exactly how many vouchers have been redeemed, when and where, giving complete visibility of campaign performance.

A “fixed-fee” pricing model with a guaranteed level of consumer participation is possible by running the activity for just as long as is required to meet the voucher redemption targets and then immediately suspending the activity. This is only possible as PayPoint and i-movo can activate and manage the campaign in real-time. With no PoS displays to remove and vouchers set to expire shortly after issue, all financial risks can be managed with absolute precision and without the safety-net of promotional insurance.

Benefits

In summary, this radically different approach to sampling offers brand owners the following benefits:

  • A single, identifiable fee including all costs with no need for promotional insurance
  • Guaranteed levels of performance
  • Zero impact on supply chain, the retailer sells at their normal price and replenishes the product in the normal manner
  • Instant, national coverage of 99.1% of the UK population across up to 23,000 retailers
  • Selective targeting of consumers using their PayPoint receipts
  • Positive consumer reaction: digital vouchers distributed to mobile phones are convenient and popular with consumers
  • Automatic reimbursement of retailers within 6 days without any effort on their part
  • Very fast set-up times with no requirement on store operations other than processing voucher transactions
  • Instant visibility of campaign performance down to retailer level