Opia announces a new sustainability-focused Trade-In Program for driving sales
Supported by their end-to-end promotional service, Opia’s new Trade-In Program enables brands to offer their customers an eco-friendly option for easily upgrading their devices.
London, UK, November 9th 2023 – Today, Opia, a global leader in strategic and tactical sales promotions, proudly unveils its sustainability-focused Trade-In Program. The program supports brands and retailers in enabling their customers to recycle their outdated devices and receive the highest trade-in value when upgrading to the latest models. Opia’s extensive network of recyclers ensures the best market value for the traded-in devices, while their end-to-end service provision ensures a consistently high-quality and convenient experience for both brands and customers.
“It's a transformative approach for brands and retailers seeking an uplift in sales and market differentiation that also supports their sustainability credentials," said Chief Operating Officer at Opia Laurent Kretzschmar. "With our excellent resources for validating claims, fraud prevention, orchestrating collection and returns, and handling end customer payments, we can ensure an exceptional customer experience, which contributes to strengthened brand reputation and, ultimately, growth."
Addressing the responsible handling of today’s rapidly changing electronic devices, from used Smartphones, laptops, and Smart watches to broken electronics or other home appliances, is critical. Opia works with its network of recyclers to optimise the usage of these unwanted devices that customers wish to trade in. Services include refurbishing and reselling devices, reusing salvaged components or, as a last resort, their ethical disposal. Their Trade-In Program can be seamlessly integrated as an easy, plug-and-play, always-on sales solution, making it a must-have for tech brands seeking to demonstrate their commitment to improving sustainability. With its comprehensive network of recycling partners, each specialising in certain product types, Opia can provide the most appropriate method of reusing or recycling constituent parts for almost any tech product. Moreover, brands and retailers can seamlessly switch between recyclers to ensure alignment with their current objectives.
About Opia
Opia helps brands and retailers maximise their sales and margins with efficient and disruptive sales promotions campaigns. Our experience expands into some of the biggest consumer brands in the world, including Google, Samsung, Microsoft, Dell, HP, Staples, Sonos and LG. Helping them achieve their sales objectives while protecting margins.
Our campaigns are built on proven mechanics that will drive sales, product upgrades and refresh and will achieve results at lower costs than price discounts can do.
We handle all aspects of your sales promotions from creative ideas, risk and compliance, data insight, fraud prevention, customer service team, logistics and more.
Contact:
For more information: Opia | Trade-In Program | Recycle Your Old Device
Jasmine Gledhill – Head of Marketing – [email protected]
How To Reduce Fraud on High-Risk Sales Promotions
Running successful sales promotions is a key strategy for many brands looking to boost their revenue and engage with their customers. However, as the number and diversity of digital transactions accelerate, so do the tactics used by those looking to exploit promotions for their own gain. This rise in promotional fraud can cause significant financial loss for your business and negatively impact its brand reputation.
We explored the rise in promotional fraud and what types of fraud are most prevalent in an earlier blog. Now, new data from Ekata reveals that ecommerce fraud is expected to exceed $48 billion in 2023, up from $41 billion in 2022. So, what can you do to minimise the risk to your business?
In this blog, we look at ways to help you tackle promotional fraud, first identifying what promotions are at the highest risk and then what strategies can be put in place to prevent it.
Understanding a promotion’s risks versus the benefits
As a global sales promotion agency, we’ve handled over 4 million claims across 40+ countries. So, when it comes to fraud, we fully understand the risks involved.
In general, the bigger and more widespread the promotion, the more likely it will be to be targeted by fraud. However, as these types of promotions also often generate some of the best revenue and awareness for your brand, we don't want to discourage you from running them. Yet, we do need to increase fraud awareness and implement robust prevention measures.
What sales promotions are at a high risk of fraud?
With our significant experience in designing and delivering sales promotions, we've identified several key aspects that can lead to a higher risk of fraud. These include:
- Promotion type
- Volume
- Claim process
- Other risks
Promotion type
Cashback campaigns are one of the higher-risk promotions. These are where monetary rewards are paid via digital prepaid cards, bank transfers or other specified methods to customers who purchase a designated product.
Prepaid cards can significantly increase risk, as they’re generally high value and desirable to the fraudster. By working closely with your prepaid card provider and sharing intelligence, you can work to reduce this threat.
Gift with Purchase promotions are also a top target for fraud. These offer customers gifts when they purchase a specified product, and typically, the higher the value of the gift, the higher the fraud risk.
Volume
High-volume promotions will understandably attract more fraud attacks as there are more opportunities. However, high volume also refers to the number of claims permitted per household. To reduce risk, submissions per household should be less than three.
Value
Higher-value promotions are also very appealing to fraudsters, especially when gifts have a high resale value.
Claim process
The ways claims are processed also impact the prevalence of fraud, for example:
- If photographic evidence of purchase is not required
- If the promotion offers an instant claim period or instant validation
- When claim processes use an algorithm that can be easily decoded
Put measures in place in your promotion to avoid these circumstances, and you'll quickly reduce fraudulent attempts.
Other risks
There are a whole variety of other factors that can make a sales promotion susceptible to fraud. A few key examples include:
- A new promotion concept – these require a careful risk assessment
- High marketing activity, which increases awareness and interest (sometimes from unwanted parties)
- Multiple retailers or geographical locations used in the promotion
- Promotions in high-risk territories
- Terms and conditions that are complex to police
- The use of certain branded gifts or retailers (there are trends for particular retailers to be targeted)
What strategies help reduce promotional fraud?
While fraud attacks are increasing and continually evolving, this should not deter you from leveraging the very effective tactic of sales promotions to drive sales and gain market share. However, it is essential that your fraud prevention strategies are regularly reviewed and updated to ensure they continue to offer the necessary protection.
At Opia, we have proven expertise in implementing fraud strategies that safeguard our clients and their promotional activity. Our Fraud Strategy Framework is made up of four key elements:
Prevention – proactively managing fraud risk
Detection – enhancing our technology, manual checks and knowledge
Investigation – consistently and thoroughly; saving intelligence for future prevention
Deterrence – making fraud attacks difficult by ensuring they result in severe consequences
Within this framework, there are specific key actions we advise implementing, particularly when running high-risk promotions. These include:
- Delaying the fulfilment period for promotions by up to 30% of the fulfilment period for Gift with Purchase promotions and up to 50% for cashback promotions
- Implementing stricter fraud policies, for example, using a higher percentage of checks when processing claims
- Considering whether optical character recognition is a suitable tool for verifying claims and whether further manual checks are required
- Regular reviewing fraud levels on your campaign to identify any red flags
- Carrying out regular spot checks on all retailers, particularly those identified as high-risk
- Monitoring of online traffic, identifying and evaluating any suspicious behaviour
These steps are some of the critical measures needed to minimise fraud in a high-risk promotion, helping to combat its costly impact on your business and its reputation.
However, every promotion is unique in its approach and will require a tailored approach to fraud prevention. By partnering with Opia, our skilled fraud team can support you in implementing robust strategies that ensure your sales promotions are protected.
To find out more, please get in touch with our team.
How Do Sales Promotions Tap into the Psychology of Buyer Behaviour?
Creativity and imagination are valuable attributes when designing sales promotions for your products and services. However, even the most ingenious concepts can fall flat if they don't resonate with your audience. For your business to succeed, you must understand the psychology behind your buyers’ behaviour to unlock the potential of your sales promotions.
At Opia, we recognise the profound need to understand your audience to capture their attention and influence their action effectively. In this blog post, we share how we tap into the psychology of buyer behaviour to create sales promotions that can drive your sales and growth to new levels.
The Power of Persuasion
At the heart of every successful sales promotion lies the art of persuasion. By leveraging psychological principles, we can transform your sales promotions from merely creative to highly effective ones that resonate deeply with your target audience.
Key factors involved:
1. Cognitive Bias
People often rely on cognitive shortcuts when making decisions:
Anchoring: This is where judgements are based on an initial piece of information. For example, in a pricing context, if a product's original price is set very high (the anchor), they may perceive any subsequent discounted price as a great deal.
Scarcity: This is when a higher value is placed on things that are limited in availability. Scarcity can also create a sense of urgency for fear of missing out. Both reactions will influence buyer behaviour.
Social proof: This is when customers look to others to affirm a decision or action. For example, customer reviews or endorsements can increase customer trust and confidence.
Understanding these cognitive biases allows us to design promotions that appeal to these natural tendencies.
2. Emotion-Centred Decision Making
Emotions play a significant role in consumers' choices, often more so than rational or logical considerations. Sales promotions that trigger positive emotions like excitement, joy, or even fear of missing out can be highly effective in driving decisions. Emotionally charged promotions or advertisements are also more likely to be shared and remembered.
At Opia, we appreciate the power of emotional connection. When designing your promotions, we aim to evoke specific emotions to instigate action from your audience. For example, a heartwarming story may be used to elicit feelings of empathy and connection with your target market. This emotional connection can translate into customer loyalty and engagement.
3. Reciprocity
The principle of reciprocity is another potent psychological tool that we leverage when designing our sales promotions. It involves offering something of value upfront, which encourages your customers to reciprocate by making a purchase.
Reciprocity is used across many of our promotional mechanics, for example, Cashback, Gift with Purchase and Trade-In promotions.
Crafting the Perfect Promotion
Now we've explored how psychological aspects influence buyer behaviour, let's explore how these can be integrated into a promotion to deliver successful results for your brand:
1. Know Your Audience
Understanding your target audience is the first step in creating effective promotions. What are their pain points, desires, and triggers? For us to tailor promotions so that they align with a market’s specific needs, we first need to gain this crucial understanding of your audience.
2. Align with Your Brand
When creating your promotions, we ensure they seamlessly align with your brand identity and values. This consistency builds trust and credibility, reinforcing the psychological connection between your brand and the customer.
3. Clear Communication
Clarity is key. We ensure that your promotions are communicated clearly and concisely. Ambiguity can lead to confusion and deter potential buyers.
4. Test and Adapt
The beauty of digital marketing is the ability to test and quickly adapt your strategies. By monitoring the performance of your promotions and gathering data, we can optimise the approach to ensure the best ROI.
Getting behind the psychology of your customers will help ensure the best results for your promotions. By tapping into cognitive biases, evoking emotions, and implementing the principle of reciprocity, we can help you craft promotions that not only capture attention but also drive conversions and brand loyalty.
Get in touch with our team today if you'd like help making psychology the superpower behind your promotions.
AI Spotlight: How Opia uses AI to elevate service delivery - Part 1: Claim handling
It's no secret that digital technology keeps evolving at lightning speed! With every article or post we read, there seems to be talk of new innovations. But there's one development in particular that's been turning heads and sparking conversations in recent years – AI!
At Opia, we're passionate about pushing the boundaries to find new and better ways to deliver our services. And AI is one tool that is helping to drive this progress and take our processes to the next level. The result? An improved customer experience that's more efficient, higher in quality, and delivers even greater value.
That's why we're excited to share our ‘Opia and AI’ 3-part mini-series, where we'll be delving into key areas of our business that have been transformed by AI-driven solutions. Get ready to dive into the fascinating world of AI and explore behind the scenes of how these impactful AI developments have become an invaluable asset for us at Opia.
Part 1: AI & Claim Handling
In part 1, we're taking a look at claim handling, one of the key services we provide that ensures our client's end customers enjoy a seamless experience of our promotions. But first, let's take a more general look at the transformational influence of AI.
What is AI, and how is it revolutionising the way we do business?
AI, or artificial intelligence, is pretty incredible! It involves developing computer systems that can do things we typically associate with human intelligence, like learning, problem-solving, and even communicating. The goal is to mimic or enhance human capabilities.
In recent years, AI has become a game-changer for businesses in various industries. Its ability to process massive amounts of data and make intelligent decisions has transformed the way organisations operate. It's all about boosting efficiency, improving the quality of products or services, and cutting operational costs. From streamlining complex workflows to optimising resource allocation, AI has opened up new doors for growth and innovation like never before.
AI finds its value in many different settings, but right now, it shines brightest when handling large amounts of data or taking care of repetitive tasks. By doing so, it frees up personnel to focus on more strategic or creative tasks. AI's knack for providing valuable insights from data and predicting outcomes also means it can enhance quality control and identify anomalies, which is a major advantage for countless organisations.
It's this ability to process large volumes of data that has had a huge impact on the efficiency of our claim handling.
Discover OCR: Our AI tool for efficient and accurate claim handling at scale.
At Opia, we work closely with leading global brands to create and manage a wide range of sales promotions. These promotions often require customers to submit evidence to validate their claims, such as receipts or product information. In the past, our dedicated team manually processed thousands of these claims each month, which consumed a significant amount of time and effort.
The technology to convert handwritten or printed text into a machine-readable format has been around since the 1980s and 1990s. While it was hoped that this traditional OCR (optional character recognition) technology could save time and effort, back then, it still needed manual input to create templates and rules and review outputs.
But things have changed. We've embraced the power of AI, which now works in conjunction with OCR to create an automated system that delivers accurate results. Today’s AI-powered OCR has revolutionised our claim validation process. This amazing technology is able to analyse patterns of light and dark in scanned or photographed text to detect numbers and letters and create a machine-readable format. By leveraging machine-learning capabilities, AI-powered OCR can then analyse the information to make data-driven decisions and determine the validity of a claim.
We aim to use OCR validation on as many campaigns as possible. However, before each campaign gets started, we do a risk assessment to check its suitability in regards to fraud or complexity. For more complex campaigns, we sometimes opt to use human handling to ensure all intricacies are appropriately evaluated. Currently, a very large number of claims received by Opia are validated using AI, using one or more various solutions and 3rd party-platforms we have in place, and it has delivered several key benefits:
A better end-customer experience
By using AI-driven OCR, we can process customer claims much faster, often in a matter of a few minutes. This significantly improves the experience of customers who know almost immediately that they will get their reward. Furthermore, our clients benefit from improved levels of customer satisfaction, which typically results in greater customer loyalty.
Improved time and cost efficiency
OCR has drastically reduced the time and effort we need to spend on claim validation. Instead of manually reviewing and transcribing information, OCR automates the extraction of relevant data from claim documents, whether that’s receipts, product QR codes or packaging, allowing for faster processing, reduced labour costs and data capture to help with campaign insights. With better efficiency in our operations, we can pass more money back to our clients, enabling them to spend on bigger and better rewards for their customers: a win-win situation!
Enhanced accuracy
OCR also brings enhanced accuracy to the table. By automating the data extraction process, we minimise the risk of human errors that can occur during manual entry.
While concerns exist around the accuracy of AI, our data shows the opposite to be true. Quality assurance is a crucial part of our promotions, and we are continually assessing the accuracy of our claim validation processes to ensure we deliver the best results for our clients. These quality control checks consistently show that AI outperforms humans when it comes to accuracy! It is only with this proof that AI-driven OCR is the best option that we continue to use it for our clients’ promotions.
Increased productivity and strategic growth
The introduction of OCR has had a remarkable impact on our productivity and strategic growth. By automating the extraction and verification of claim data, OCR frees up valuable human resources to focus on more strategic tasks, increasing productivity and operational efficiency. No longer processing simple claims, our team can focus on more complex campaigns where the evidence provided is too complex even for AI, and further optimising our services.
Compliance assurance
Compliance is of utmost importance to us. We configure our OCR technology to adhere to industry-specific standards and regulatory requirements, ensuring that all claim data is processed correctly and in line with guidelines, especially in regards to data protection. We handle large volumes of sensitive customer data for our clients, so providing this assurance is hugely critical.
AI, specifically AI-backed OCR technology, has been a game-changer for us when supporting our clients' promotional claim validations. It has enabled us to offer a high-quality, efficient service at scale so that more of our clients' customers can enjoy a fantastic promotional experience.
In our next instalment of our Opia and AI mini-series, we’ll be talking about fraud prevention, another key area in our sales promotion delivery. While it is a service that is carried out behind the scenes, it is much more critical than many people realise.
Delve into part two of our mini-series to learn how all claims must go through robust fraud screening systems before any claim validation is carried out. Also, discover how AI tools, such as behavioural biometrics and fingerprint recognition, uncover suspicious online behaviour and how millions of data points are stored and analysed each time a claim is submitted to confirm its activity is not fraudulent.
Gran Turismo: How to boost excitement around your brand with the thrill of speed
Gran Turismo is out in cinemas on August 11, 2023. Based on the highly successful video game, this film will showcase the thrill and adrenaline of car racing. However, it also tells the real-life story of a game-player turned racing driver, where dreams become reality. With such a buzz around the first film adaptation of Gran Turismo, tapping into this market by offering cinema tickets as part of a promotion this summer will help drive excitement around your brand.
In this article, we share the insider details on the new Gran Turismo movie and how you can design cinema reward promotions around action movies like these, leveraging their anticipation to boost engagement with your brand.
What is the movie Gran Turismo all about?
There’s a lot more to this movie than just racing cars. Yet, those who enjoy the rush of racing won’t be disappointed. In the film’s sneak preview, actor Archie Madekwe, who takes the starring role of Jann Mardenborough, describes the action as "heart-pounding." Meanwhile, Orlando Bloom, who portrays Danny Moore, a Motorsports marketing executive, tells the audience to expect "body-vibrating sounds."
However, this movie has a lot more depth to it too.
Gran Turismo is based on the real-life story of Jann Mardenborough, a British professional racing driver who participated in the GT Academy and won a drive with Nissan at the Dubai 24 Hour. Sony tells the story that follows his journey through the Academy. Mardenborough beats 90,000 other participants to become their youngest champion and goes on to drive as a professional race car driver.
The official plot synopsis describes how the film portrays "the ultimate wish fulfilment tale of a teenage Gran Turismo player whose gaming skills won a series of Nissan competitions to become an actual professional race car driver.” It’s a movie about how dreams can become a reality. But getting there takes a whole load of guts, determination and dedication.
Leverage new action movies to build Cinema Rewards promotions.
When a new action movie is due to be released in cinemas, there is an immense build-up of excitement and anticipation amongst fans of the genre. And if the film is part of a franchise, whether that's a string of action movies, such as Mission: Impossible, or a high-profile video game, like Gran Turismo, there will be an existing base of devoted fans, keen to be first in the queue at the movie's launch.
You can tap into this excitement and channel it towards your brand by creating a promotion that includes cinema tickets as a reward or incentive and timing it to coincide with the film's release.
How do Cinema Rewards work?
Cinema Rewards are a creative incentive that you can use to design a promotion that will capture your audience's attention. By offering your customers this treat of a night out at the movies, you can boost motivation to buy, drive customer acquisition and strengthen loyalty.
There are many ways you could build cinema rewards into one of your brand promotions. For example, you could pair cinema tickets with a product or service to create a Gift with Purchase style promotion. Another option would be to use them as a part of a rewards program for referrals and recommendations. Time these promotions with a big film release, and you can be sure you'll generate engagement and extend the reach of your brand.
If you have any questions about how to build Cinema Rewards into your next promotion, please get in touch with our team.
248 levers to cut retail losses – which one will you pull?
It’s been a testing period for many consumer companies thanks to inflation, manufacturing price spikes and supply chain pitfalls. All of which have translated to increased costs for businesses and which can’t be clawed back because simultaneously consumers are either cutting back or trading down to cheaper alternatives.
Inevitably, there’s only one way this is playing out: lower margins. Retailers generally already have low profit margins due to the nature of their businesses, especially brick-and-mortar retailers. High volume, low margin strategies are the accepted practice for many retailers but in difficult trading conditions, the volume is lower and margins can be forced down until they all but disappear.
According to KPMG’s UK head of retail, Paul Martin in Q1 this year, “With overall inflation running at around 10%, and food inflation sitting nearer 20%, total sales growth ... of just 5% will be eating hard into retail margins and masking the true state of the sector’s health.”
Inflation takes its toll on consumers who face household increases in their food bills, fuel, energy, broadband, mobile phone, council tax bills on the horizon and so on. Consumers will continue to take steps to reduce spend where they can - switching where they shop, what they buy, whilst also cutting back on activities, such as eating out and takeaways.
Some of the more influential retail sectors have seen recent downturns in sales; footwear, clothing and accessories which are non-essential but typically buoyant, have seen consumers hold back. Furniture and homeware have been driving sales growth on the high street and online, but these are starting to struggle as household budgets remain squeezed. Electronic devices – especially the big ticket items – are similarly impacted, despite being typically resilient sectors. However, according to Euromonitor in its half-year update of 2023, affordable electronics products such as smart wearables, earbuds and smartphones will be relatively unaffected.
Manufacturers and retailers are also hit by rising costs in materials, supply chain, staff, energy, rents and so on. In fact, there are estimated to be some 248 different line items – or levers to pull – and consumer companies should have a plan to reduce each item by 10-25% over the next 24 months. Companies need to look at the price rise in every line item as a potential loss of margin and come up with strategies to cut those losses. It’s a stark message: if you can’t take costs out, you’ll see declining revenues.
One area where consumer companies retain some control is with their retail pricing strategy. As much of the growth in retail is being driven by inflation, price and promotional strategies have become increasingly important growth engines for retailers.
Customers are looking to cut costs and it might seem sensible to lower prices to bring in more customers by making the product more affordable. But is it right? What does it do to margins, does it lead to sales now, is it relevant, attractive, is there an added time-limited incentive?
Behavioural economics says that price has as much to do with psychology as it does with affordability: social status, limited supply, price anchoring, value and benefit all have a role in determining perceptions of price. Price will nearly always be part of the purchase consideration.
Slashing prices can stimulate customer interest and action, but it can also create immediate impacts elsewhere that are hard to recover from, such as price competition and devaluing brand perception. Not only that, but reducing the sale price also reduces the margin and becomes a brute force, blanket measure. And with the current pressures facing consumer companies, who can afford to lower the margins further still?
Instead, sellers can offer incentives to purchase; there are many different types, including gifts with purchase, trade-in of older products, and rewards of vouchers or cash, which are just some ways to incentivise a purchase. The complexity of promotions can be managed so that they are agile and responsive to market dynamics, but brands and retailers must be careful to insure themselves against unforeseen costs.
In contrast to price drops, promotions can be data-led to target potential new customers or segments, they can help a business to manage stock levels, attract new customers and revive flagging interest, drive sales for products at reduced risk to the customer, help companies maintain relevance with customers and maintain the margins on goods.
When commercial levers are managed well, companies are more likely to preserve and protect their consumer base while minimising negative impact on margins. Getting the approach to incentives right is a careful mix of art and science: one incentive-based sales campaign might be part of the long-term strategy using complex data to make forward looking decisions, and another might be set up, managed and closed over a short period to take advantage of an unexpected opportunity or to help shift inventory.
Sales and marketing teams within brands and retailers need to look at the mix of levers they can pull to get customer attention, stimulate interest and desire, and lead the customer to take action and purchase. There has never been a single lever but in the context of the 248 levers that can be pulled to cut losses, pulling the lever marked ‘promotions’ might be one of the fastest and most effective in protecting margins.
8 Enticing Benefits To Running Sales Promotions
Sales promotions are valuable marketing tools that can deliver fantastic targeted benefits for your company. Often temporary in nature, typically, they use an incentive to attract and engage your customers and motivate them to make a purchase or take a specific action.
When designing a sales promotion, there are various mechanics you can use to help you achieve your goals. These could be cashback rewards, gifts with purchase, trade-ins or buy-and-try offers. Whichever method you choose, your sales promotions can deliver a range of outstanding benefits.
Below, we share 8 enticing benefits of running a sales promotion for your company, highlighting why this tool is one you should include in your sales and marketing strategies.
1) Increased Sales
Increasing sales is a goal that almost every business seeks to achieve, and sales promotions are a highly effective method of accomplishing it. Sales promotions can drive immediate sales and generate revenue for your company. By offering cashbacks or discounts, time-limited offers, or other incentives, you can attract more customers and encourage them to make purchases.
2) New Customer Acquisition
Sales promotions are an excellent tool for winning new customers who may not have considered buying from your company. Using special deals or introductory offers, you can entice prospective customers to try a product or service and encourage them to switch to your brand. The result? – an increase in your customer base.
3) Target Slow-Moving Stock
One of the great things about sales promotions is that you can design them to target specific product lines or services. These may be stock that is slow-moving, end-of-season or of which you have an excess that you wish to clear out. By offering discounts or bundle deals, you can quickly sell off surplus stock, freeing up space and capital for new inventory.
4) Enhanced Brand Awareness
Sales promotions can create buzz and generate attention for your brand. With exciting offers and engaging campaigns, they get people talking, increasing brand visibility and audience reach. An intelligent and compelling sales promotion often creates a ripple effect, with customers who take advantage of the offer sharing their positive experiences with others and extending your reach further.
5) Strengthened Customer Loyalty
Offering exclusive deals or rewards to your current customers can strengthen their loyalty and encourage repeat purchases. Sales promotions can be designed to target existing customers, demonstrating appreciation for their support and incentivising continued engagement with your brand.
6) Enhanced Competitive Edge
In today’s competitive climate, gaining the edge over your competitors will help your business grow and succeed. Sales promotions can differentiate your brand from others in your sector by offering better deals, added value or attractive incentives. These strategies will help entice customers away from your competitors and increase your market share.
7) Upselling and Cross-selling Opportunities
Sales promotions can be an effective strategy to encourage your customers to upgrade their purchases (upselling) or buy complementary products (cross-selling). For example, you can offer bundle deals or incentives for purchasing higher-value items. These promotions will increase the average transaction value and your business’s overall revenue.
8) Build Valuable Data and Customer Insights
Sales promotions provide an excellent opportunity to gather customer data and insights. Often, they require participating customers to provide their details or engage in specific actions, such as signing up for newsletters or filling out surveys. This requirement enables your business to collect valuable data on your customers, their preferences and buying behaviour, which can inform future marketing efforts and personalised targeting.
It's worth noting that while sales promotions offer many significant benefits, they need to be carefully planned and executed to avoid negative consequences like eroding profit margins, encouraging customers to postpone purchases and wait for promotions, or damaging the brand's perceived value. However, with strategic planning, clear objectives, and meticulous evaluation of the outcomes, you can maximise the benefits of sales promotions and help drive the growth of your business.
How Opia Can Help
Opia is a creative sales promotion agency that focuses on collaborative partnerships to successfully create, execute and oversee innovative promotional campaigns for our clients. Having handled over 5 million claims across 40+ countries, we know how to deliver maximum impact with minimal risk.
Why The Tech Channel Must Adopt A Through Cycle Mentality
The IT channel is currently facing some strong post-pandemic headwinds. The geopolitical situation, record inflation, lingering supply chain concerns, and the continuing skills gap among other worries have left channel partners considering how they can weather the storm.
When it comes to device sales, both resellers and retailers face additional challenges. We know the channel partners that sold technology devices had an absolutely remarkable pandemic in terms of sales. Equipping the new remote workforce was a priority for organisations, so the partners that could get devices like laptops, notebooks, smartphones, screens and peripherals into the hands of employees enjoyed great success.
But after those boom years, we are now experiencing the inevitable drop in demand, particularly for smartphones, laptops, PCs and other devices.
The global smartphone market has now experienced a fifth consecutive quarter of decline, falling by 12% year-on-year in Q1 2023. Channel analyst Canalys noted that despite price cuts and heavy promotions from vendors, consumer demand remains sluggish. This especially is the case in the low-end segment, as high inflation affects consumer confidence and spending.
Customers – whether B2B or consumer – are holding onto devices for longer and delaying outlays on major purchases and upgrades.
Another important factor for partners are the changes to how people purchase devices, which began during the pandemic when the world went online. Even procurement managers are now comparing and purchasing products directly from their partner’s website, or their retail chain equivalent, which adds to the price pressures throughout the channel and the need to differentiate with some other kind of added value. This has continued post-pandemic, with macroeconomic and cost-of-living pressures sending many consumers online in search of transparent information and the best deals.
Adopting a ‘through-cycle’ view of sales
These ongoing shifts in buying behaviour prompt obvious concerns among resellers and retailers: How much excess stock do they have sitting in their warehouses or in distribution? How similar are the products in price? Are they holding on to stock for too long? Are they offering products at the right price to attract customers but still deliver margins?
In this scenario, vendors and partners may rush to offer sales and discounted products to clear their inventory. However, this only reduces margins – at exactly the same time that inflation might be pushing their costs and the device manufacturing costs higher. It is also almost impossible to later increase prices when customers have seen them sold for less, which also undermines their perceived value of the products. They end up in a race to the bottom on pricing, which is something partners need to avoid at all costs.
Instead the channel must adopt a long term ‘through-cycle’ view of sales to avert short-term panic about the current slowdown. The term describes an approach based on value creation that enables companies to outgrow their peers, both during downturns and in the subsequent recovery. That could be growing their core business, but they may look at geographic expansion, value chain integration, or moving to adjacent markets.
This is already evident in the channel, where both device manufacturers and channel partners have been forced to consider new value propositions based on long term thinking.
“It’s not just about getting a phone or a laptop for the next two years or three years as it might normally be,” said Runar Bjørhovde, research analyst at Canalys. “It’s thinking about the residual value of the device at the end of those three years. Can we trade the device in? Can we sell the device off to another partner? Can we bundle laptops and smartphones together? That’s Apple’s strong value proposition to why their business is still going very well on the B2B side.”
Creating value and building trust
Many retail partners are also embracing online channels by setting up better digital and physical infrastructure suited to large-scale online business. New developments focus on adapting the customer experience and offerings. As part of this, consumer electronics channels are no longer trying to solely be a product reseller. They are increasingly bundling in insurance, tech support, data services, extended warranties and, in many cases, selling mobile subscriptions for MNOs.
The channel is focused on offering customers service choices through bundled solutions to create channel user stickiness and to attract new customers.
Elsewhere, they are increasingly looking to drive the market for devices through refurbish programmes. There is a huge push from the EU around giving devices a second or third life though refurbishment or recycling. This should be an opportunity for vendors or channel partners to develop programmes that sit within that model – and they should take advantage now.
In both these examples, channel organisations must consider what motivates customers to take immediate action and how they can offer the right value and incentives to make that happen. This could take the shape of a promotion that enables organisations to trade-in old devices for discounts or rebates, or to collect and refurbish old equipment, bundling relevant peripherals, even ‘buy and try’ promotions on new products. If the objective is centred around increasing market share, then trading in a competitor’s brand for a new model of your preferred brand might also be an option. Sales promotions are often most effective when multi-layered, and adapted to a commercial need: sales volumes are all very well, but not at the expense of margins that do not make commercial sense.
Channel organisations may consider the market such that they need to think of promotions as a regular part of their business. Partnering with an experienced third party who can advise, source the right promotions at the right price, ensure fulfilment, manage the customer relationship, help with metrics analysis and act as a true partner could be the ideal strategy. Make the right partner decision and your promotional activity will bring profit and nurture customer loyalty.
“The market contracting is a good way for channel partners to look around and see where the next opportunities are coming from. Where should we invest right now? Are we prepared when the demand growth picks up again?” said Bjørhovde.
Above all, the current market challenges are a chance for partners to create long-term value and solidify their position as a trusted advisor. It’s also an opportunity to build trust through adopting a complete ‘through-cycle’ view of sales.