Tuesday, October 17, 2017 | Today's Vending Industry News
What Coin-Op Can Learn From The Cosmetics Trade

Posted On: 9/26/2017

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It is possible to find marketing inspiration in the most unlikely industries. I would argue that there are real benefits to looking at improbable and unfamiliar industries for inspiration. Preconceptions are cleared away to allow uncluttered view of marketing dynamics. With that in mind, let's look at the cosmetics industry.

One of the most competitive and lucrative industries on the planet, cosmetics is brand-centric with a highly knowledgeable user base. There is also an enormous range of prices. However, it is when considering the mid- to upper-price ranges that things get very interesting at the retail level. Of course, the brands are well known, the packaging is distinctive and sophisticated, and the advertising support abundant. But there is another factor at work. Cosmetic companies arm their sales personnel with the powerful tool of free samples. It's a strategy that's equally brilliant and effective.

Salespeople regularly provide a carefully chosen handful of free samples for an entry-level purchase, then "gifts" of increasingly higher value as the sales total rises. It is very much like tipping the customer, while providing not so subtle justification for the reluctant consumer to accept the upsell. Not only is it an effective marketing tool, but it's also a cost-effective promotion of new products.

Of course, savvy cosmetic shoppers know this trick. It is what lures them in and helps win their loyalty to a brand. Sometimes samples and free gifts are openly promoted with signage and displays, and others times they are used at the discretion of the salesperson.

At no time in coin-op's history has this kind of promotion been more within reach or applicable. While new technology has made creative game pricing possible, the range of other offerings at a typical family entertainment center provides nearly unlimited opportunities to "tip the customer." Added to that is the ability to promote full- and limited-time promotions through social media. Some large FEC chains are already doing something similar, though the concept is absolutely scalable.

What is needed but not readily available off the shelf is a trained staff. It needs one that can sell, upsell, and "tip" with something dazzling aplomb. Although related, these are distinctly different skill sets. To be frank, it requires more than simply memorizing the giveaways at each level of expenditure and graciously taking money. It is very much a sales job that leaves the customer with no regrets about the purchase.

Tipping the customer is not a new concept. Adding value to the sale has been around as long as there have been cash registers, maybe even longer. Who doesn't like cash back on credit card purchases or frequent flyer miles? And to travel back into dimly recorded history, many will still remember S&H Green Stamps. Now, that same strategy, aided by technology, is working its way into businesses of all types.

Part of this trend may be attributed to the increasingly competitive business environment. Another factor may be due to an increasingly sophisticated customer base that requires an extended and expanded effort to build brand loyalty.

The good news is that the tools are within reach of nearly everyone. The trick, I believe, is to be creative. A lackluster promotion, no matter the dollars-and-cents payout, will inevitably fail to excite a customer base. Good promotions, like everything else, require creative packaging. As the folks in the cosmetics industry have learned, it's got to make them feel good about themselves.