Why “promo drug” is dangerous for a retailer and how not to “get hooked” on it.

Dmitry Logginov, co-founder of the creative agency Michurin, about what the trademark is different from the brand, and why discount promotional campaigns don’t make customers loyal to the retailer.

There are lot of companies in the retail industry are actively using discounts and promo campaigns to attract customers to their stores. However, such a strategy, although it gives a quick and noticeable gain, may turn out to be erroneous: at the end, the consumer gets used not to brands, but to discounts. Dmitry Logginov, co-founder of the creative agency Michurin, developer of strategic and creative solutions for Ukrposhta, Foxtrot, LTB, KLO, Honda Ukraine, Bigl, Alfa Bank, Brusnichka and others, in the column for RAU explains how to avoid the danger of getting used to “promo drug “.

There are dozens, or even hundreds, of definitions of what a brand is and how it differs from a trademark. I like the simplest one: the brand is a trademark, which evokes the consumer’s emotions (associations, perception).

Why do owners and top managers invest in creating a brand and forming the proper image around the company / product? The answer is obvious – in order for the consumer to make a choice in favor of their offer, that is, to sell more. To do this, there is a large scale of communication tools: promotional activities, PR, loyalty programs, image campaigns, viral marketing, BTL and so on.

In highly competitive markets, companies have minimal differences from each other.

The development of technologies (the ability to quickly copy solutions), the work of market regulators and other aspects cause the situation when companies don’t have anything uniquely different from competitors. There is no ration could say “only with us”. There are many such segments: the financial market (banks, AMCs, insurance companies), the fuel market, telecoms etc.

How to attract the customers?

Carrot and stick. Under the carrot is understood the formation of emotions around the company (service, mood, confidence, etc.), which are based on the company strengths. The stick acts as a discount and promotion (often combined).

Promotion is a very powerful tool and it is actively used by different companies.

What is its strength? There are many advantages and the main ones are:

1. Planning horizon. Campaigns are easily scaled and projected;
2. The possibility to online monitor the effectiveness of the campaign (especially in combination with a CRM program);
3. Good involvement. To get something as cheap as possible, and ideally – in general “on the ball”: the national character trait. Sometimes it seems that consumers are similar to Indians who change their money to Chinese cheap cigarette lighters.
4. Multi-platform. You can use different channels (digital, ATL, BTL, etc.) to increase the effect.

There are other advantages that make this type of activity one of the most common and replicated in communication.

What is the other side of the coin?

Discount and promotion become a kind of “morphine”. This is one of the most common and effective pain killers, it is still used in medicine. However, what if you give a little slack and allow yourself to relax? The autobiographical story “Morphine” by Mikhail Bulgakov very vividly allows you to look at the degradation of the person and body of the addict. A good analogy, which shows what happens to the brand, if it “gets hooked” on the promo drug.

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