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Barry Frankel, owner of The Family Vending Co. in Coral

Springs, Fla., recently decided to participate in the SPIO

network. “As long as the promotions continue to come with val-

ues, the purchase of the drink becomes insignificant,” he said.

In a previous role as a cold drink manager for a beverage

bottler, Frankel saw the ability of on-can promotions to drive

sales. One promotion he remembers was $5 off the price of

admission to Universal Studies. “It was a great promotion

for a very large customer; it got you an account and also

helped drive sales,” he said.

“We’ve got to bring the customer back to the vending

machine,” Frankel said. “This will give us new value.”

In the meantime, more is being learned about the at-

work consumer market.

At-work consumer: A tArget Audience for mArketers

The at-work consumer has a higher level of disposable

income than the rest of the population. As busy profession-

als, they are willing to pay a premium for convenience, often

saving time by running errands on office time to stores

within a 5-mile radius of where they work.

At-work consumers also spend the majority of their day

in commercial areas, literally surrounded by hundreds of

stores and restaurants. Naturally, they are going to visit

these businesses more often than the average consumer –

often just to take a break from the office.

Because the at-work consumer spends 60 percent of

their waking hours at work, they are often looking for new

“pick-me-ups” to help keep them focused and alert. At-

work consumers are more prone to making impulse buys.

In the past, these highly valuable yet largely untapped

consumers had to actually leave the confines of their cu-

bicles to forage for this elusive “something.”

Work place focused, direct marketing companies target

this valuable demographic audience and attempt to deliver

products to them in the work place.

If the recent Chick-Fil-A promotion is any indication, vend-

ing machines have a big role to play in not only work place mar-

keting, but in many types of targeted consumer marketing.

Vend product manufacturers add value with on-pack offers

Vend product manufacturers have periodically partenered with other consumer product marketers to offer vending customers added value. Last year, general mills inc. offered $3 off any movie or game rented at Hollywood Video and movie gallery on some of its core products.

the success of the program encouraged general mills to introduce another $3 off any movie or game purchased at Best Buy on three of its core products, sweet & salty Bugles, gardetto’s original recipe and chex mix traditional.

the offer is announced in a big colorful label on the front of the bag. there is no work for the vending operator. “You cannot pass any amount on the operator or it’s a ‘no go,’” said charla sheffield, associate marketing manager for vending at general mills.

stu case, a partner in Pacific Brokerage co. inc., the Yorba Linda, calif.-based product brokerage, said the promotion is better than other types of manufacturer promotions that have been done in the past since there is no extra work required on the operator’s part.

“it (the general mills promotion) has driven additional cases,” case said.

Vending mAcHine: A consumer destinAtion

Prezzano said the vending machine has an advantage for mar-

keters since it is a destination for the consumer. “The consumer is

making a particular choice to go to that machine because they’re

getting something else there,” he said.

In addition to redeemable cards, the machine also dispenses

a magnetic stripe card that can be loaded with value for use in a

retail store. There is also a patented Website decoder that contains

an imbedded code that becomes visible when held up to a Web

page on a computer screen.

Prezzano, who exhibited the system at the Direct Marketing As-

sociation trade show recently, said SPIO is making waves because

the direct marketing industry is beginning to focus more on work

place marketing. What SPIO brings to the table is being able to

interact directly with the consumer.

Retailers in particular are learning that work-site marketing, which

is also known as “alternative print media,” is a cost effective way to

target consumers with disposable income. In the work place, marketers

find an attentive audience for messages that focus on convenience and

value. In some cases, employers offer coupons as perks through payroll

checks, intraoffice mail or other company correspondence.

work PLAce mArketing: An emerging industrY

Work place marketing experts don’t question the role that vend-

ing machines can play in these efforts.

“Work places and vending machines are as natural a pair-

ing as coffee and a doughnut,” said Dan Wheeler, executive vice

president of WorkPlace Media, a Mentor, Ohio-based company that

develops creative graphics and distributes them to selected work

sites. “When you consider that 83 percent of working Americans

rely on caffeine to get them through the day, and another 72

percent rely on some sort of vending machine snack such as gum,

chips or candy bars, the value of targeting workers right in their

cubicles is undeniable.”

Where traditional business-to-business marketing has focused

on reaching the location manager or account decision maker and

relying on that party to communicate information to consumers,

the vending machine offers the marketer more direct access to

the consumer.

“What I tell them (the product marketers) is we’re going to get

them to their consumer,” Prezzano said.

One example is the financial services industry, which is looking

to interact with high school and college students.

Vendors must ProVide LocAtion informAtion

In seeking vending operator partners, Prezzano said he looks

for operators who can provide demographic information about

their accounts; this is what the clients want to know. He requires

vending operators to provide input on the number of vends per

year, what type of business the location has, and how many

people are there.

The video screen will make the opportunity even stronger,

Prezzano said. “The video screen has the trackability,” he said.

“Marketers are ecstatic about it.”

dobbin Prezzano of sPio says marketers in many industries are inter-ested in reaching consumers directly.

At-work consumers’ daily “pick me ups”

Caffeinebeverages 43%

Coffee

Saltedsnacks

Candy bars

Cigarettes

source: workPlace media employer survey

For more informaton, contact:

sPio, 866-604-7746, www.gospio.net

www.AMonline.com 03.08

Vending takes new role in marketing

promotions

Electronically reprinted with permission from Automatic Merchandiser magazine • March 2008

get my foot in the door to get customers,” he said. “It ‘walked’

them in the door. We never expected to get 15 to 20 percent

return, but we did.”

O’Neal wanted to get the coupons in the hands of kids in

schools. He knew that if a kid got a coupon for a free item, they

would bring their parents with them to the restaurant, and they

did. SPIO produced the coupons for him.

The SPIO promotion delivered better results than the direct

mail programs O’Neal did in the past.

In one instance, ice cream vending machines dispensed cou-

pons redeemable for free ice cream at the restaurant. “It was a

win-win for both of us,” O’Neal said.

O’Neal said the more generous the offer, the more successful it is.

“We had new customers that never ate at Chick-Fil-A ever,”

said Connie Lee, who was the marketing director for the restaurant

when the promotion began. “With these venders, we were reaching

people we couldn’t reach.”

Lee said that prior to the SPIO project, her options for pen-

etrating schools and work sites were limited.

Vending Brings mArketers A new tooL

She previously designed nutrition education programs for

schools that helped to get the restaurant’s name in front of stu-

dents. In the B&I sector, she approached managers with “be our

guest” coupons for free meals for employees. She even developed

inserts for employee paychecks, but this was difficult to get em-

ployers to agree to.

“You can’t just walk into a factory and pass out coupons,”

Lee said. In comparison, she said, “the vending machine was

wonderful.”

Dobbin Prezzano, president and co-founder of SPIO, brought

an extensive background in marketing and direct mail to vending.

“These are very high response rates,” he said for the SPIO promo-

tions. The average response rate for a more traditional direct mail

promotion is 2 percent.

63%69%

74%54%

80%92%

85%73%74%

52%89%

Purchase coffee close to work rather than close to home

Don’t decide what they’re having for lunch until they’re at work

Buy lunch at least four times a week

Don’t eat dinner with their families every night

Not sure at 4 p.m. what they’re having for dinner

Use discount coupons at restaurants

Purchase fuel just before, during or just after work

Have business related travel booked from office

Shop for groceries during the work week

Have ordered a birthday gift online

Use discount coupons at grocery stores

At-work consumers: a prime audience for marketersthe at-work consumer has become a target market for consumer product manufacturers. following are purchase habits of these consumers.

Source: WorkPlace Media employer survey

The SPIO system consists of a coupon dispenser that is installed

in the vending machine. When a vend is made, a promotion is

dispensed simultaneously. It can be an offer to receive a free item

from a restaurant or $5 off a $25 purchase at a retail store.

SPIO provides the dispenser at no cost to the participating vend-

ing operator. SPIO provides the operator with coupons, either plastic

or paper, in clips that are placed in the machine to be dispensed.

The only cost assumed by the vending operator is the labor for

installing the dispenser.

innoVAtions offer oPPortunitY for Vending

All of these innovations are happening at an opportune time for

the vending industry, since traditional vending has become increas-

ingly unprofitable due to a shrinking customer base and rising costs

and more competition from other retail channels.

Innovations such as Quickstore24™ and SPIO could give the vend-

ing industry the tools it needs to bring a higher level of value to the

consumer. Preliminary indications are that this is beginning to happen.

SPIO recently completed a successful test with a Chick-Fil-A

restaurant in Oglethorpe, Ga. Promotional offers were distributed

through vending machines within a 10-mile radius of the store.

Consumers redeemed the offer for a free food item. The redemption

rate was around 20 percent, which is 10 times greater than most

traditional coupon promotions.

Chick-Fil-A isn’t the only consumer product marketer to see merit

in the vending promotion. SPIO has recently signed similar arrange-

ments with Direct TV and Blockbuster.

sPio enHAnces customer exPerience

“It’s a pretty effective way to put your ad right in the hands of

the consumer,” said Chuck Treister, executive vice president of vend

partners for SPIO. In addition to lifting sales for the vending opera-

tor, the coupon enhances the experience for the customer and the

location. “It’s what it does from a standpoint of customer relations,”

Treister said.

Treister, who has worked in vending operations and equipment

manufacturing, said coupon redemptions are not a new idea in

vending. However, earlier programs required some labor on the part

of the vending operator.

“A lot of (product) manufacturers have dabbled in this concept,”

said Dennis Thornton, a partner in Advanced Vending LLC, the

Ringgold, Ga. who participated in the Chick-Fil-A promotion. What’s

unique about SPIO is that the operator doesn’t have to do anything

extra and the marketing offer is very well targeted to the end user,

resulting in a win for every party involved.

“It’s just an SKU that the driver keeps filled,” Thornton said.

cHick-fiL-A redemPtion rAtes surPAss industrY AVerAge

“The consumer is really liking it,” Thornton added. He said in

some locations, redemption rates have been as high as 70 percent.

The average rate has been 20 percent, which is still high compared

to most coupon redemption programs, according to direct marketing

industry sources.

A key factor in the success of the Chick-Fil-A promotion was the

value of the offer. In the promotion, offers were made in vending

machines for three consecutive quarters. Consumers received one

of six offers redeemable for a free item with the purchase of a snack

or beverage.

“Most offers are worth more than the consumer is paying for the

item in the machine,” Thornton said. “It makes a significant impact.

There is no doubt about that.”

Another benefit that vending offers to product marketers is the

ability to tailor a promotion to a location. “There are different adver-

tisers that want to be in different venues,” Thornton said.

SPIO is in the process of introducing a video screen to the ma-

chine that will further enhance the promotional effort. “I think this

is going to be unbelievably successful,” Thornton said.

couPon disPenser: A direct connection to consumers

Terry O’Neal, owner/operator of the Chick-Fil-A store in Ogletho-

rpe, Ga., agreed the promotion accomplished some things that no

other promotion has. “They (SPIO) could go places where I couldn’t

dennis thornton of Advanced Vending LLc, based in ringgold, ga., said consumers like the sPio coupons.

C o v e r S t o r y

promotionsechnology is giving vending machines new promotional

capabilities. As a result, consumer product marketers

are beginning to see vending machines as tools to do

more than market products for immediate consumption. They

are beginning to see vending as an avenue to encourage consum-

ers to buy a wide range of items, including financial services, TV

services, vacation packages, and more.

In the past few years, technology players have developed

touchscreen video screens and coupon dispensers that can

be retrofitted to existing vending machines. These devices, on

vending machines, enable consumer product marketers to reach

consumers in school, at the work place or in transportation and

at entertainment hubs.

The ability to target a message to a consumer in the at-work en-

vironment in particular has raised eyes in the marketing community.

In January, Automatic Merchandiser reported on the Quick-

store24™, a vending machine that has interactive video touch-

screens, multiple payment options, and on-site dispensers that give

redeemable coupons. This system was developed by a Walker Digi-

tal, LLC, a company that focuses on finding solutions using modern

information technologies.

In February, Automatic Merchandiser reported on another

technology solution, the SPIO system, that utilizes coupon

dispensers and interactive video touchscreens to give vending

machines new capabilities as marketing vehicles for consumer

product manufacturers.

coupon dispensers in vending machines allow consumer product marketers to reach consumers where they work and go to school. By Elliot Maras, Editor

A customer receives a redeemable coupon

from a sPio dispenser.

C o v e r S t o r y

connie Lee helps introduce chick-fil-A customers to the sPio promo-tion, which allowed her to market to consumers directly.

wonderful.”

63%69%

74%54%

80%92%

85%73%74%

52%89%

Treister said.

industry sources.

or beverage.

C o v e r S t o r y

wonderful.”

63%69%

74%54%

80%92%

85%73%74%

52%89%

Treister said.

industry sources.

or beverage.

C o v e r S t o r y

the consumer.

people are there.

Coffee

Saltedsnacks

Candy bars

Cigarettes

promotions

the consumer.

people are there.

Coffee

Saltedsnacks

Candy bars

Cigarettes

promotions

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work consumer market

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work place focused

consumer destin

average consumer

consumer product marketers

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