Karl Lagerfeld, Chanel's chief designer, recently made headlines by suggesting that Chanel customers lose weight if they want to wear his tiny new "shrink-to-fit" creations. Yep, that's right, if you want the privilege of spending three grand for Chanel couture this year, you gotta drop some pounds.
 Although everyone got a lot of laughs out of his advice (particularly his "this is not something fascist we are imposing" remark) his apparent disregard for the customer struck an uncomfortably familiar chord when it comes to the promotions we see coming out of too many packaged goods promotion agencies.
Today, packaged goods suppliers need an agency to come up with promotions that work -- not just a cute concept and pretty packaging -- but that help specific accounts increase both brand and category sales (and/or profits) without requiring big time labor expense to implement.
Moreover, the Sales Department now needs to provide a strategic rationale for the promotions it presents to "add value" to the creative inherent in the basic promotion idea. Ideally, this rationale should be consumer-based and account-specific -- meaning linked to the shopping behavior and purchasing habits of the specific heavy-user base that shops a particular account.
On top of this, accounts have a strong bias for promotions that are structured to make better use of their own internal promotion vehicles -- e.g., frequent shopper programs, direct mail, check-out surprises, in-store media, local media and Web sites, etc.
To avoid "Lagerfelding" you need an agency that combines its creativity with an understanding of the importance of today's top accounts in today's marketing mix.
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The problem is, many promotion agencies are not staffed, structured or trained to accommodate these new requirements. They are, in a word, "clueless" about what goes on at retail. Perhaps even more important, they are unaware that this dimension of promotion planning even matters.
If you have the uneasy feeling that your current promotions are trying to force your customers to "shrink-to-fit" in deference to your promotional artistry, it may be time for formal Agency Reviews. To avoid "Lagerfelding," you need an agency that combines its creativity with an understanding of the importance of today's top accounts in the overall marketing mix and the specifics of how and why each of these accounts provides (or does not provide) full merchandising support to manufacturer promotion recommendations.
Today, you have to look for both the icing and the cake. The "cake" has to be relevant to and compatible with the account's overall merchandising strategy, tailored to the account's needs and strong enough financially to be different and stand-out -- and it has to produce long-term incremental share gains for the brand.
So what do you look for in an agency? Here are our top ten criteria, to which you can add your own:
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- Willingness to work not just with the Marketing or Promotion Department, but with Customer Marketing and Sales personnel.
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- Understanding of current trade promotion issues/spending levels and ability to help maximize these investments via developing, coordinating and linking consumer promotion initiatives with innovative trade promotion ideas that go beyond "feature, display and TPR's."
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- Direct experience with -- and understanding of -- promotional "do's and don'ts" for your top accounts.
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- Personnel with the backgrounds and training to converse effectively with your Sales Department top execs and Key Account Managers and interpret and translate their needs into programs that can be implemented.
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- Capacity to provide you with the strategic rationale that can serve as the basis for promotion creative development.
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- Understanding (and accepting) the need in today's environment for promotions that are built from the ground up for certain accounts (Level 1), customized for others (Level 2) and "tailored" for all others (Level 3).
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- A top management that gets out in the field to see what's happening at retail and takes independent initiative to determine the likes/dislikes of the key people in those accounts that are most important to its clients.
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- A Credentials Presentation that focuses on what they know about what motivates your consumer in your accounts, their shopping patterns and behaviors -- not 20 pages of (boring) "agency philosophy and mission" up front and leave-behinds that won't fit in a manila file folder.
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- The ability to identify retail equity-building opportunities that are consistent with your consumer and have an acceptable ROI.
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- An agency that knows enough not to use the words "National," Sweepstakes" or "Contest" in the Credentials Presentation.
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There are, indeed, consumer promotion agencies that meet these criteria. If your agency is still operating on the Lagerfeld "shrink-to-fit" philosophy, then begin tomorrow to find an alternative.
While "shrink-to-fit" may have been compelling and relevant in 1993, the marketplace changes of the last 10 years have morphed it into a fascist entity.
Does your agency's top management even know this? 
Christopher W. Hoyt is President of Hoyt & Company LLC, a packaged goods training and consulting organization based in Scottsdale, AZ. He may be reached via his web site at www.hoytnet.com
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