Local cosmetic distributor uses loyalty rewards to reinforce product value, and regain market share from counterfeiters.
Background
Sproxil – July 2017 1 The Nigerian skin care market is broadly divided into two categories. Some consumers buy and use locally sourced or manufactured substances like Shea butter and coconut oil. The other group favors imported products from big cosmetic brands. Although they are more expensive than their local alternatives, a significant chunk of this market falls into the latter category. Thus, importation and distribution of such products can be quite lucrative, especially when one is the sole distributor of those products in the country.
Corporate Focus Resources is a Nigerian marketing company which imports and distributes a range of Swiss cosmetics called Otentika®. The Otentika® range consists of various lotions and serums which work to fade unwanted blemishes, as well as even out and brighten skin tone.
Insight
The Nigerian cosmetic industry is worth over $700 million. Of this figure, bath, shower & skin care products account for over 55%. It is also an industry plagued heavily by counterfeit goods. Very often consumers begin to notice that their creams do not work as well as they used to. When this happens, they either conclude that the company has started to compromise on quality to make more profit, or that the product is counterfeit. With no way to distinguish original from fake products, they often move on to using other products in the market.
Problem
Sales of Otentika® creams had declined substantially due to an abundance of counterfeit goods that were hard to distinguish from the original product. Many customers had stopped buying due to loss of faith in the brand, and sales numbers were declining to a dangerous low.
After seeing the positive results Sproxil Defender had on Lonart®; a popular antimalaria drug which had suffered brand infringement issues a while ago, Corporate Focus Resources turned to Sproxil.
The Sproxil Solution
Sproxil designed for Corporate Focus, a loyalty reward program with built-in product authentication so that only buyers of genuine products would receive rewards. The rewards were a combination of assured incentives as well as sweepstakes with an iPhone7 as the grand prize to heighten expectations.
When customers bought a tube of cream and sent an SMS for free to Sproxil’s short code, the system would immediately cross reference the code to confirm the product’s authenticity. If it were a genuine product, the buyer would receive confirmation of the product as well as an airtime recharge of fifty Naira to that number.
In addition to this assured reward, their phone numbers were also automatically entered into a raffle for the ultimate prize, which was an iPhone 7, a model which had just been released at the time.
Results
Within 60 days of the campaign, Corporate Focus saw an increase in sales revenue of over 600%. Customers who liked the product but had begun to question its authenticity were encouraged by the incentive to buy the product. When asked to describe the effect that Sproxil Champion had on his business, the response of Arinze Okonkwo, the CEO of the company was ‘Splendid.’ According to him, the Champion solution was the reason his customers started buying more, as they were now aware some of the products they were buying had been fake and now had a means to know for sure.
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