Red Bull’s formula for driving sales

Red Bull has gained a reputation for offering some of the best prizes in the cash and carry calendar – and inspiring some of the most eye catching displays – with its cricket-based Flying Wickets activity, but this year it has introduced a new theme.

Just as in previous years the best participants in its annual incentive scheme can win a sports-related overseas trip, but instead of the opportunity to follow the England cricket team overseas, this year the prizes are a ‘money can’t buy’ trip to the Spanish Grand Prix in Barcelona, and depots have been encouraged to celebrate Red Bull’s Formula 1 connections.

Explaining the change from cricket to Formula 1, Red Bull’s customer marketing manager for cash and carry Claire McEntee says: “The thing about Red Bull is that we want to excite people and to do that we have to keep things fresh and new. We have a Formula 1 racing team and we thought we could leverage that, and we knew a lot of depot managers absolutely love Formula 1. It’s also something different for customers in depot, and it makes sense to tie in Red Bull properties with customers.”

Another change was that last year Red Bull invited retailers to join in with displays in their store, but this year the focus was purely on cash and carry depots and their staff.

The most fundamental change, however, was in the ambitious new remit for the scheme. Instead of judging solely on the basis of sales volume and uplift, as in previous years, the criteria were widened and this year the search was for the ‘perfect outlet’.

McEntee says they wanted to move away from just rewarding depot managers on sales, and instead reward them for getting the basics right in the way they handle Red Bull. Also, she says, just judging on sales put smaller depots at a disadvantage because they can’t put on the type of increases larger ones can. In addition to rewarding depot managers, Red Bull also wanted to provide incentives for shopfloor staff, and it introduced a tiered rewards scheme which included them.

The first step for running the scheme was to come up with a set of criteria that depots could be judged on, and Red Bull came up with six targets for depots to match to be the ‘Perfect Outlet.

They were:

l stocking a full range of Red Bull products;

l no out of stocks;

l pricing had to be clearly visible;

l Red Bull should have at least 30% of sports and energy drink space within a depot (based on its 35.9% value share of the market in total on and off trade, according to Nielsen data);

l Red Bull’s August promotion should be in place with two secondary sitings;

l there should be a creative display away from the fixture.

The three-month scheme began on July 1 with Red Bull’s field sales force of regional account managers and more than 50 business development executives visiting participating depots. As part of the initial visit they would judge the depot against the criteria, and then discuss with the depot manager what could be done to become the ‘Perfect Outlet’. They then explained that they would visit again in August and reward any positive changes.

At the August visit they judged the outlet again and for each improvement against the criteria they awarded one point. For each point awarded there were instant prizes for the staff responsible with one point earning a Formula 1 cap, two points equated to a T-shirt and three won a hoodie. McEntee comments: “When you reward someone at that moment in time you have much greater impact because they can see the result. We got great feedback from that and going forward we will definitely continue to use an on-the-spot prize system because we did really benefit from it.”

Depots that scored more than three points were eligible to win an iPod or a Wii, with 18 winning the top prize of the trip to Spain. This prize will include seats in the Red Bull suite, and an opportunity to visit the garage to see the cars during a two-night stay at the Grand Prix in Barcelona in May 2010. The winners of these prizes will be notified at the end of this month, but two other winners, being rewarded for the displays built in their depots for the August promotion, have already been chosen. They are Sajid Mahmood, manager of Bestway’s Bolton depot, and Zed Ahmed, the director in charge of BA Cash Carry’s Cardiff depot.

At the Bestway branch cases of Red Bull were used to build a Formula 1 car covering eight pallets just in front of reception. Mahmood comments: “It was very eye catching and we used POS to indicate the price promotion. It had a real ‘wow’ factor. Retailers stopped to look at it. This is great because we were bringing a little bit of Red Bull magic to the depot. Something a little bit different that no one else really does.”

He says Red Bull’s business development executive Josh Bentham helped with the creation of the display, and adds: “I ensured the Red Bull bays and tower end were full of stock and we created a secondary siting with a Red Bull branded cage in the BWS section so the retailer had a number of chances of seeing the promotion.”

He had to order extra stock to cope with demand as a result of the promotion, and adds: “In the last six years Red Bull has given me great experiences. I have won a trip to Jamaica to watch the cricket World Cup and Barbados to watch the England cricket team.

“I always participate in the incentives and my depot is always a winner. It’s both a personal incentive to go on a Red Bull experience as well as a volume driver in depot.”

Zed Ahmed describes himself as a big fan of Formula 1 and is looking forward to the trip to Barcelona. For BA, the Red Bull promotion coincided with a trade week and Red Bull agreed to support it with a Red Bull Mini and the Red Bull rodeo in depot. Ahmed says: “We decided to amalgamate the Formula 1 display within the trade show and two members of staff used about 10 pallets of Red Bull to build a 12 foot wall surrounding the two Red Bull elements. Retailers were impressed by the impact.”

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