Last month, I discussed a lottery promotion that had worked well for my office coffee business. It not only educated my customers on new items that I carried, but it also gave my clients a chance to win one of the eight products or services listed on their lottery tickets. The bottom line was that we increased sales of those new products and services, as well as added to our profitability.
The next successful promotions we ran were offered only to those accounts that were purchasing less than $1,000 monthly. We wanted to find a way to increase sales to customers who were basically ordering only coffee and related allied products.
To do this, we initiated our Bloomingdale's Purchasing Gift Program by mailing an offer to all our client contacts who qualified for the program. In short, the more products the client purchased each month for three months, the more gift value the client would qualify for.
Our salespeople and telephone account representatives would wait several days for the mail to reach our customers. We would then contact buyers and ask whether they had received our Bloomingdale's offer. Our reps would explain that they had a chance to receive free products for their companies, or a personal gift valued up to $100. Here is an example of what we said:
"Ms. Smith, we have averaged your monthly order over the past three months and you are currently ordering $82 a month. Our new Bloomingdale's promotion will give you $25 in free products or a gift certificate to Bloomingdale's if you increase your monthly order to $100 over the next three months. If you increase it to $125, the gift is $50; at $150 the gift value is $75; and over $175, the value will be $100."
You'll observe that we offered the buyers either free goods for their companies or a gift for themselves. Many buyers were owners of their own firms and preferred the personal gift.
Once the decision-maker was informed of the promotion, our staff suggested some of the additional products and services we had to offer.
After 30 days, the customer service or sales person would call the account and inform them of their sales for the first month, and attempt to sell additional products. Depending on the season of the year, items that sold well in that season (hot chocolate in the winter, for example) would be promoted as timely and appealing ways to increase dollar volume.
When an account reached 60 days into the program, the same scenario would take place; and if there were any moneysaving promotions going on at that time, they would be offered, too, to encourage purchases. Example: "We are promoting our cold beverages, so for every purchase of two cases of soda or juice, we will give you 20 bags of chips."
After 90 days, our staff would inform the contacts of their average purchases for the three-month period, and the value of the gift. If the customer were short of the next prize level by a few dollars, the account rep would round up to give them the higher value. Again, contacts had the choice of either free goods for their company or a Bloomingdale's certificate. If it were the certificate, we would ask where they would like the gift to be sent.
The following month, our reps would call the contacts who had chosen the gift certificates and ask what they had purchased at Bloomingdale's. This helped increase mutual loyalty between the account and our staff. Our reps then asked their clients whether they could refer another company to us for our services, and explain that if our company got their referral as a customer, we would send them another $50 gift certificate.
The key to a successful program of this kind is to compensate the sales and customer service representatives who work to increase your sales volume. Our sales staff already had a built-in compensation program with monthly commissions plus signup bonuses for new accounts. The CSRs were compensated for the additional volume brought in through the gift-certificate offer by giving them one-half of the gift values awarded to their customers. If a new account were generated by the referral, our salesperson would share 25% of the salesperson's new-account compensation.
This particular program increased our overall sales and added new customers. It was a win for our customers and staff alike, and profitable to our company, too. We also created nice camaraderie between our salespeople and our customer service representatives.
The money offered for the Bloomingdale's gift program was based on values 15 years ago. If you adopt this program, you may want to revisit the dollar amounts offered.
If any of you would like a copy of the certificate we sent to kick off the Bloomingdale's program, please send me an email and I will forward a picture. Next month, I will describe two additional moneymaking promotions that worked well for our customers and for our company.
If you have used any successful promotions, please let me know about them. I can be reached at (516) 241-4883 or OCSconsultant@aol.com .
LEN RASHKIN is a pioneer in office coffee service. He founded Coffee Sip in 1968 and later merged it with Dell Coffee, of which he became president in 1991. Sales at Dell topped $7 million. He also founded the Eastern Coffee Service Association and National Beverage & Products Association. He is a speaker at national and local trade conferences, consults on OCS sales and marketing, and is the author of two OCS training programs.