Question

Topic: Strategy

Should Pos/pop Displays Be Free?

Posted by k.pohlman on 7/18/2019 at 1:21 PM ET 250 Points
We are a growing business that is now receiving requests for showroom displays to promote our products. Product samples are pricey by themselves and we are still in the process of designing a display which will become a costly investment going forward.

How do businesses normally handle this expense? Do they eat the cost an hope it pays off? We've kicked around the idea of charging for the display with a reimbursement plan for orders above a certain dollar amount. The thought is to weed out people mildly interested in our products.

Any input would be greatly appreciated.
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RESPONSES

  • Posted by Peter (henna gaijin) on 7/18/2019 at 7:18 PM Accepted
    The short answer is it depends. Cost of display, expectation of sales that would come from it, etc. all matter.

    One client I worked for sold ceramic Japanese soaking tubs. They provided tile color samples and a miniature soaking tub as displays, both of which had significant costs. When a showroom signed on, we did provide them. But the signing showroom did have significant other costs they had to bear, including buying 1 tub (at a less than wholesale price) for display on the floor and some other accessory items.
  • Posted by chiron34 on 7/18/2019 at 9:08 PM Member
    Could you provide more information about your products and the cost of preparing a showroom display? With a query about relative costs & benefits of a discrete marketing activity, it is difficult to give advice without some knowledge of the facts. How long will the display remain in situ before it will be changed? Will this be a one-time action for, say, three months only, then removed? Or are you looking at a much longer timeframe for this? How many requests for a showroom display have you received?

    If you have, for example, four requests for a showroom display, could you develop four different displays and rotate them between showrooms on a periodic basis?

    Why do you think the showroom proprietors are asking you to mount a display? What is the benefit in such a request for the showroom proprietors? In that respect, one would expect that space on a showroom floor will have an economic value, so presumably the showroom proprietors will be receiving some financial benefit for allocating this space to you. How does that relate to your costs of preparing the display?
  • Posted by k.pohlman on 7/19/2019 at 8:12 AM Author
    We offer drainage systems for residential to industrial. The specific product that displays are being requested for is a decorative system with channels and grates for high-end pools/residential/community green spaces. We're estimating the cost of the display to be around the $500-$800 range. The display will be evergreen with only periodic literature updates. So far, we've received 7 requests for displays. The purpose of the displays is for proprietors to showcase/sell our products at a profit. Many of the proprietors offer landscape/pool products/services and our products are a specialized part of the overall projects.

    Our main goal here is that we are looking for advice on what the industry standard is for providing displays to proprietors. I've worked for Harley-Davidson who charged dealerships for displays and I've seen other companies that offer them for free. We are looking for a cost effective option that provides ROI for all parties involved.
  • Posted by chiron34 on 7/19/2019 at 11:42 PM Member
    I think you need to complete a formal cost/benefit analysis that will enable you to compare the various options and variables. A cost/benefit analysis is often particularly helpful in determining small decisions that are immediate in scope of time. It is a useful tool in identifying the implications and impact of different courses of action, the dilemma you are facing. More specifically, the cost/benefit analysis can reduce projects or decisions to a purely numerical context, which makes comparison between projected outcomes very clear.
    There are libraries devoted to the management & conduct of cost/benefit analysis exercises. It is a subject too complex for me to go into here. But you should get some help to resolve your dilemma from these reference links:

    https://www.thestreet.com/personal-finance/education/cost-benefit-analysis-...
    https://templatelab.com/cost-benefit-analysis-templates/
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