ATL and BTL Promotions

Promotion can be loosely classified as "above the line" and "below the line" promotion. The promotional activities carried out through mass media like television, radio, newspaper etc. is above the line promotion.

The terms 'below-the-line' promotion or communications, refers to forms of non-media communication, even non-media advertising. Below-the-line promotions are becoming increasingly important within the communications mix of many companies, not only those involved in fmcg products, but also for industrial goods.

Some of the ways by which companies do BTL (below the line) promotions are by exhibitions, sponsorship activities, public relations and sales promotions like giving freebies with goods, trade discounts given to dealers and customers, reduced price offers on products, giving coupons which can be redeemed later etc.

BELOW THE LINE SALES PROMOTION

Below the line sales promotions are short-term incentives, largely aimed at consumers. With the increasing pressure on the marketing team to achieve communication objectives more efficiently in a limited budget, there has been a need to find out more effective and cost efficient ways to communicate with the target markets. This has led to a shift from the regular media based advertising.

A definition of below-the-line sales promotion given by Hugh Davidson:

'An immediate or delayed incentive to purchase, expressed in cash or in kind, and having only a short term or temporary duration'.

Methods of below the line sales promotion

1. Price promotions

Price promotions are also commonly known as" price discounting". These can be done in two ways:

(1) A discount to the normal selling price of a product, or

(2) More of the product at the normal price.

Price promotions however can also have a negative effect by spoiling the brand reputation or just a temporary sales boost (during the discounts) followed by a lull when the discount would be called off.

2. Coupons

Coupons are another, very versatile, way of offering a discount. Consider the following examples of the use of coupons:

- On a pack to encourage repeat purchase
- In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer
- A cut-out coupon as part of an advert
- On the back of till receipts

The key objective with a coupon promotion is to maximize the redemption rate – this is the proportion of customers actually using the coupon.

It must be ensured when a company uses coupons that the retailers must hold sufficient stock to avoid customer disappointment.

Use of coupon promotions is often best for new products or perhaps to encourage sales of existing products that are slowing down.

3. Gift with purchase

The "gift with purchase" is a very common promotional technique. In this scheme, the customer gets something extra along with the normal good purchased. It works best for

- Subscription-based products (e.g. magazines)
- Consumer luxuries (e.g. perfumes)

4. Competitions and prizes

This is an important tool to increase brand awareness amongst the target consumer. It can be used to boost up sales for temporary period and ensure usage amongst first time users.

5. Money refunds

Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer.
Customers often view these schemes with some suspicion – particularly if the method of obtaining a refund looks unusual or onerous.

6. Frequent user / loyalty incentives

Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples of this are the many frequent flyer or user schemes used by airlines, train companies, car hire companies etc.

7. Point-of-sale displays

Shopping habits are changing for the people living in metropolitan cities. People prefer big retail outlets like Big Bazaar to local kirana stores. Most of the decisions of buying are taken by the virtue of point-of-sale displays in these retail outlets.

SOME INTERSTING EXAMPLES OF BTL PROMOTION

Most of the big brands are following the suit of BTL promotion because of rising prices of media based promotion, advertising clutter and increased impulse purchasing.

Some of the interesting examples are:

Most of the educational institutes like career launcher, Time and PT are holding informative workshops and free tests for students which give a direct interaction of these institutes with the target customer and hence a suitable platform to sell themselves.

Ring tones and music videos on cell phones are helping the entertainment industry to promote for a music video or a movie for dirt-cheap rate as compared to media promotion.

Various companies sponsor sport events to promote their brand, but nowadays media companies like Hindustan Times are holding weekly events through out the country in which companies can put up their stalls, display banners and posters and arrange for some fun activities. These events give the companies a platform at very low price to promote their brand and increase visibility among target consumer. These companies also give discount coupons to winners in the games, which in turn boost the sales of the products and ensure that first time users try these products as well.

Pepsi organized an inter school cricket event for 425 schools across 14 cities which did wonders for the company by promoting the brand amongst the right target customer for almost no cost.

Most of the pharmacy companies do BTL promotion by getting shelf space through doctors to display their products or by giving away free calcium tablets again through doctors, knowing that for a patient a personal advise from a doctor would hold more value as compared to a commercial advertisement.

Another interesting BTL promotion was by NIKE, an athlete dressed up in Nike sportswear could be seen jogging on an elevated treadmill for the whole day on National Highway 8, Delhi.

BTL promotions are gaining popularity among all big companies nowadays considering their effectiveness because of the "individual customer promotion" at a price, which is much lesser than the normal media promotions.

Funnel Management

Funnel Management (Issue 1)

Introduction

As you already know, The Lead Generator provides the best quality sales leads available, but that's not all there is to successful selling. This ezine is designed to provide you with additional practical methods to help you be more successful in sales.

Funnel Management

Prioritizing your work is the key to effective time management, but the question is, How do you do it? Do you come in in the morning, open up your contact manager and ask yourself, let's see what I have to do today? Or do you have a method for prioritizing your work that will make you, and your company, the most money in the shortest amount of time?

We have found that a simple spreadsheet is the easiest way to make sure that you're "doing the right things," not just "doing them right."

The theory behind our Funnel Management spreadsheet is the concept of the Expected Value of a prospect. The Expected Value is a function of "what a sale would be worth" if it pans out, and the "probability of success" of that sale. Thus, if a sale to Prospect #1 is worth $500 if it closes, but the probability of it closing is only 50%, then its Expected Value to you is $250, not $500.

This becomes important because, if you have an opportunity with another prospect, you can compare them and decide objectively on which one you ought to be working. So, for example, if Prospect #2 represents a potential sale of $400, but has a probability of closing of 75%, its Expected Value is higher, at $300, than the $250 value of Prospect #1. All other things being equal, Prospect #2 is the one you should be working on.

This is summarized in the spreadsheet below:

Prospect	Potential Revenue	Probability of Sale	Expected Value	Comments
#1	$500	50%	$250	Even though this has the higher potential
#2	$400	75%	$300	This is the one to work on

This gets you a long way towards effective time management, and the model can handle a lot of prospects and activities. But it's very rarely the case the "all other things are equal," so we need to add another factor.

The next most important factor to consider is time. That is, when will something close? When something closes, with "sooner" usually being better than "later," is important because we never want to have too much quota left over at the end of the month. Anyone can make quota, given unlimited time; but we don't have unlimited time, so we have to account for it.

The Funnel Management approach differentiates opportunities on the basis of when they are going to close, as well as what they are worth. Borrowing a technique from Strategic Selling, we differentiate between Suspects, "C" prospects, "B" prospects and "A" prospects on the basis of which are "closest to closing" versus those which are "farthest from closing." An "A" prospect is closest to closing, and a "C" prospect is farthest from closing, with "B"prospects somewhere in the middle. And a Suspect is someone whom we haven't qualified yet, so we don't know how close they are to closing. (Almost every prospect starts out as a Suspect on our funnel.)

In practice, the question of "closeness to closing" requires us to think of more than just time. We also have to consider the work we have to do in order to move the prospect forward in the sell cycle. (Work, of course, takes time, so you can see the connection.) In funnel management, our units of time aren't just hours, days, weeks or months; we have to include "effort."

Prospect	Potential Revenue	Probability	Expected Value	Expected Close Date	To Do	Comments
#1	$1,000	90%	$900	Oct. 1, 2000	Schedule 1 person	This is the "A" Prospect
#2	$1,000	90%	$900	Dec. 1, 2000	Schedule 10 people	This is the "B" Prospect

Think about two new examples, each one is a $1,000 opportunity with a 90% chance of closing (i.e. EV=$900,) based on what you know today. In the first case, all you have to do is schedule one User to attend a training class, and the sale is done if he likes what he sees. In the other case, also worth $1,000 and with a 90% probability, you have to schedule 10 Users for the class, and again, only the one guy has to like it. Obviously, the first case requires less work than the second. In fact, it may take you into the next month to get the second one scheduled, no less get it closed.

Even though the probability and value of the sales are the same, they don't mean the same thing to you. The second one will take more work, and it may even get "screwed up" in the process. In fact, that 90% probability on Prospect #2 might even go down if we can't get everyone scheduled.

That's why we might call the first case an "A" prospect, because getting one person into the class is a "no brainer;" while we might call the second one a "B" prospect.

It's these type of factors, mostly time and effort, that force us to categorize prospects as "A", "B" or "C;" and at any point in time, we should always be able to say who are our "A" prospects, who are our "B" prospects, and who are our "C" prospects.

An important side-note to this discussion is that this concept contradicts what a lot of sales managers and business owners think. Many people to whom we're answerable believe that your largest prospects are your "A" prospects - but it is very wrong to think of them that way. Your "A" prospects are where your near-term revenue is coming from, and that may not include the giant prospect in your funnel who may never close. You may choose to work on the giant prospect, but you should do so only because you can justify it.

This also has the benefit of focusing us on what we have to do to move the sale along. That is, as you set up your funnel to reflect "closeness to closing," you identify what you have to do to move someone from being a "suspect" to a "C" prospect, from a "C" prospect to a "B" prospect, from a "B" prospect to an "A" prospect, or from an "A" prospect to a customer.

This enhancement to the model is shown below:

Type	Prospect	Potential	Probability	EV	Expected close	To do
Suspects	#1	$500	?	?	?	Intro mtg
	#2	$300	?	?	12/1/01	Get on bid list
"C" Prospects	#3	$10,000	5%	$500	3/1/01	Offer seminar
	#4	$200	70%	$140	1/1/01	Cover bases
"B" Prospects	#5	$300	33%	$100	11/1/00	Demo
	#6	$400	80%	$320	11/15/00	Convince VP
"A" Prospects	#7	$100	90%	$90	10/15/00	Pick up contr.
	#8	$600	50%	$300	10/1/00	Wait for decision
Total		$12,400		$1,450

A very important thing to note is that it is not necessarily the case that an "A" has a higher probability of closing than a "B" or "C" prospect. In fact, it could easily be lower if you know you're going to lose this week! Think of the case where you're in a competitive bid situation with a 50/50 chance of success. There is nothing more you can do, and the decision will be made tomorrow. It's certainly an "A" prospect - but one with a low probability of success.

A second thing to note is that this approach lets you actually plan your work around what will get you the greatest return on your investment of time, money and effort. By showing your &quotTo Do" (or next steps,) on the same form as the Expected Value, you can easily determine whether you ought to work on moving that &quotB" into &quotA-ville," or on cold-calling for a few more &quotC" prospects, or on closing some &quotA" prospects. (Of course, if you need to show more than just the next steps to keep the work in context, or you need to manage your sales expense, go ahead and add them to the sheet.)

Another important feature of this example to note is the total line. As you can see, there are two totals. The total Potential reflects what the territory would be worth if everything closed, while the total Expected Value shows a more realistic measure of the value of the territory today. Unfortunately, too many salespeople count their chickens (i.e. the potential,) before they hatch (i.e. the Expected Value.) By the way, the ratio of the EV to the Potential (e.g. $1,450 / $12,400 = 12%,) is a good measure of the relative risk in the territory.

A final enhancement you can make to this method is to add a forecast module to it, something which management generally loves to see. This can be done very simply in your spreadsheet by spreading the "EV dollars" into columns (one per month,) to the right, as shown below, based on the expected close date. You can also tweak it by accounting for a collection lag by moving the revenue out a month, and/or by spreading or repeating the revenues for project or ongoing revenue streams. We even know reps who use this to calculate their commission income.

Type	Prospect	Potential	Probability	EV	Expected close	To do	Oct	Nov	Dec	Jan	Feb
Suspects	#1	$500	?	?	?	Intro mtg
	#2	$300	?	?	12/1/01	Get on bid list
"C" Prospects	#3	$10,000	5%	$500	2/1/01	Offer seminar					$500
	#4	$200	70%	$140	1/1/01	Cover bases				$140
"B" Prospects	#5	$300	33%	$100	11/1/00	Demo		$100
	#6	$400	80%	$320	11/15/00	Convince VP		$320
"A" Prospects	#7	$100	90%	$90	10/15/00	Pick up contr.	$90
	#8	$600	50%	$300	10/1/00	Wait for decision	$300
Total		$12,400		$1,450			$390	$420	$0	$140	$500

That's about all there is to it. Funnel Management can save you time, and help you make a lot more money. And all it takes is a simple spreadsheet.