Magazine article Marketing

Just the Ticket

Magazine article Marketing

Just the Ticket

Article excerpt

Vouchers have found a true home in marketing and sales. Robin Cobb looks at how and why firms are putting them to use

What is more attractive to bankers than money? Staff at branches of Lloyds Bank are on a bonus scheme, based on a mix of quarterly sales targets and a "service quality index". The twist is that they have a choice between cash rewards or Marks & Spencer vouchers of similar value. The proportion choosing vouchers has reached 44% and is still rising, according to Michelle Ryan, account manager at the Grass Roots agency, which administers the scheme.

Retail vouchers are finding many applications in marketing and sales. They are used for staff incentives, sales promotion and customer-loyalty programmes across the industrial spectrum, from financial services to packaged goods.

They can take the form of straightforward face-value tokens to be spent at the sponsoring retail groups, product-specific coupons to be exchanged for selected items, or electronically loaded smartcards which can accumulate points that can be exchanged for paper vouchers or used directly for purchases.

There are a number of benefits for corporate users. Volume purchases attract discounts, usually starting at 2.5% and in some cases going up as high as 10%. In staff incentive programmes, they are not added to the payroll for purposes o employer and employee National Insurance (but can be subject to income tax as benefits in kind).

As premiums, they reduce handling costs compared with items which have to be packed and delivered. They are trackable through their serial numbers, reducing problems of non-delivery claims and enabling, if required, information on where and when they were spent.

Most of the major retail groups provide vouchers. They are also issued for travel and holidays by companies such as Thomas Cook and Center Parcs. Whitbrea Leisure Vouchers can be redeemed at its off-licences (Thresher, Wine Rack and Bottoms Up), restaurants (Pizza Hut, TGI Friday's and Beefeater), and hotels (Country Club and Travel Inn).

Marks & Spencer claims market leadership. Argos offers added value with its Award Bank, which administers company points programmes, and provides a mail-order service for redeemed merchandise.

Kingfisher vouchers cover some 2100 Woolworths, B&Q, Comet and Superdrug outlets, while those of High Street vouchers are redeemable across 11 retailing groups, from Iceland Frozen Foods to H. Samuel jewellers, BhS to Mother-care, totalling around 4000 outlets. The Burton Group encompasses Debenhams, Dorothy Perkins, Top Shop/Top Man, Principles and Evans as well as the Burton stores.


From this month, purchasers of Anchor cream and custard aerosol products are offered participation in a long-term loyalty programme. Proofs of purchase give 20% off the price of selected items from the Argos Catalogue, plus a free mail-in for the Anchor "Smart Cat" cuddly toy.

The catalogue is banded on-pack. It includes an order form and cream recipes. Shoppers send the aerosol nozzles together with a cheque for the discounted price of the item they have chosen. They then receive a product-specific vouche which can be redeemed at any Argos store. The direct participation by Argos means that gift fulfillment is self-liquidating.

The promotion links with Anchor's "Smart Cat" TV campaign. It is also being supported by leaflet door-drops, press advertising and competitions, and direct mail.

"We looked at a number of parties we could link in with in terms of getting a range of value-for-money items to appeal to our family-orientated target market," explains Judith Terry, senior account manager at the BLP Consultancy, deviser of the promotion.

According to Anchor senior product manager Esther Jackson, this is one of the first promotions of its type by a food product. "We haven't had such an extende programme before," she comments. …

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