Premium brands live in a very competitive world, where their name alone is often no longer enough to guarantee sales. When people need to upgrade goods – whether that’s consumer electronics like a TV, phone or laptop, appliances such as washing machine or oven, or even furniture – then they’re going to spend a significant sum. At a time when every consumer is feeling the pinch of austerity in their pocket, the want their cash to work as hard as possible. Achieving this can involve more than just a simple specs versus price comparison between item A and item B.  In fact, premium brands that rely on price alone may be the ones that fare least well.

Discounting is not the answer

Consider discounting. Customers are a savvy lot. They understand that discounting is done for a reason, and often approach discounts with a healthy scepticism. Is the item about to disappear from a product line and what will that mean for support? Does it underperform so the seller wants to offload? Is there better value for money to be had elsewhere?

The greater the discount, the more a customer raises their metaphorical eyebrow. Indeed, heavy price discounting is a turn-off for consumers and has long-term negative impact on brands as consumers hold off on purchase believing that prices will be discounted further.

The flip side of that is discounting does premium brands no favours in terms of customer perception. If all a brand does if offer money off products, it is a one trick pony. When set alongside brands with interesting offers and promotions, discounters can come to be perceived as box-shifters – interested less in pleasing customers than in offloading inventory.

Incentives are the value-add

Instead of discounting, sellers can offer incentives. There are many different types. Gifts given with a purchase, trade-in of older or unwanted products, and rewards in terms of vouchers are just some ways to incentivise a purchase.

Getting the approach to incentives right is a careful mix of art and science. It isn’t the job of premium retailers to have the expertise to do this in house. Trusted advisors – and Opia is one of the experts with years of experience – are there to help, and a brand will expect their advisor to have the skills to roll out complex logistical programmes, give good advice on appropriate incentives, and source these at the best price.

To take a pretty basic example, when there’s a big sporting tournament or a mega movie launch about to happen, we might help a TV seller run a promotion alongside free replica team kit, or discounted cinema or event tickets, or access to an appropriate streaming service. Of course it gets more complex than that, and a detailed understanding of the customer base is needed to find the right incentives at the right time.

Maximising profit through partnership

Still, the ability to find great incentives for brands is only part of the story. Brands need to focus on profitability, and they quite rightly want to stand at arm’s length from managing incentives. They want to minimise the cost involved in fulfilment, and be protected from any financial losses. They need an “as a service” provider.

This means that the brand’s partner needs to take on areas like the developing and managing the fulfilment platform – both back end and any customer facing web site and use of social platforms, TV or print advertising and so on. They also need to handle the customer service side of things dealing with redemption of vouchers, customer queries and the like.

With every incentives-based promotion there is a measure of risk. Will so many free streaming offers be taken up that the brand ends up out of pocket? Is the sports kit of good quality or will customers demand replacements or compensation for poorly sourced garments in their droves? A reputable and competent partner company will take the risk away from a brand. They’ll have the knowledge to negotiate a pricing structure with a brand that ensures even where brands run more risky campaigns, they won’t be left out of pocket. That’s what we do – and we’ve run thousands of successful campaigns.

Achieving success in tough times

Mentioned at the outset, at a time when every consumer is feeling the pinch of austerity in their pocket, they want their cash to work as hard as possible. Incentives can really achieve that for a customer, and they can also achieve it for a brand.

As consumers’ disposable income falls, brands need to work harder. Pulling back isn’t the answer. Customers have to be won – and they have to be won for every purchase. They’ll spend where they see that they’ll get best value. So for brands, one incentive based sales campaign might be part of the long term strategy, and another might be set up, managed and closed over a short period to take advantage of an unexpected opportunity.

Whatever the campaign, a tried and tested “as a service” provider is a premium brand’s best friend.