NegativeCostMarketing
Why People will Pay you to Market your Stuff
So, you don’t believe the
title to this article, huh? The fact is that people will pay you for the
right and privilege to market your stuff for you. Can you think of any example
of this happening today in your city or town? Sure you can—just look at your
local sports teams.
Isn’t it amazing that sports
fans (don’t forget that is short for ‘fanatics’) will pay not just the normal
margins but super-margin prices for clothing or other items imprinted with
their favourite team’s logo on it?
Gee, Reverse Cost Marketing Does Exist After all
They will happily walk
around (like out-of-work folks did during the Great Depression of the 1930s
wearing sandwich boards in exchange for food) with a Lakers’
It wasn’t that long ago that
people use to keep their underwear inside their clothes and, by the way,
keep the manufacturers nametag hidden too. Now, they think nothing of having
Calvin Klein prominently displayed on their CK clothing or purse or wallet or
whatever and, better still (at least, for CK’s bottom line), they will pay CK
for that right to advertise Calvin Klein.
People Used to Keep their Underwear Hidden
Now that is negative cost
marketing.
So how does that impact the
promotional products industry? Well, it matters a lot—the industry has to move
up the value chain and offer large, national clients and even local clients too
the type of solutions they need in order to keep ahead of their competition and
to stand out in a noisy environment. Remember promotional products work because
they are on display for months or years even.
Pepsi recently unveiled a
new campaign (www.PepsiStuff.ca), which
not only ‘sells’ Pepsi branded merchandise on a totally cool site (done by
Ottawa-based FuelIndustries.com)
but co-brands some of the stuff with partners like Reebok, Sony, Timex and
others. Presumably, their partners are also helping to pay the freight on this.
Pepsi Cobrands with Partners like Reebok
Now it’s true that Pepsi is
not actually selling their merchandise for cash but it might as well be—they
are using Pepsi points instead but the more a consumer drinks and the more
Pepsi they buy, the more points they get so, in a way, Pepsi is getting paid.
And these points programs work really well when the program owner (Pepsi) sells
points wholesale for cash to others (like Reebok, Sony, Timex, RogersATT,
FamousPlayers and more) who in turn use these points
in their loyalty programs. (E.g., buy a cell phone from RogersATT and get so
many hundred or thousand Pepsi points…) This leverages the investment and turns
this marketing program into a negative cost in a hurry.
What all this means is that the promotional products industry has get out of the simplistic product pushing business and into the solutions space. It is a better to pitch to talk to your clients and tell them that, maybe, they can make money promoting their products. The industry has to examine every one of its client’s requirements and ask the seemingly contradictory question: “Will people pay for Free Stuff (FS)?”
Copyright. Mark Gencher, Executive
Vice-President, Brymark.com, one of