Feargal Quinn: Vouchers still good option if you want to give gift of choice
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Q: I've never understood why customers bought gift vouchers; it just seems like reducing the value and flexibility of their money to me. In light of the HMV closure and the added risk of shops going bust, do you ever think customers are going to lose interest in them?
The HMV closure has certainly focused people on the risks associated with gift vouchers. While a repeat of this is always a possibility, the reality is that these occurrences are a tiny minority.
On the issue of honouring vouchers, I do think there needs to be some legislative change to prioritise these vouchers on the creditors' list in some way.
However, I don't see customers losing interest in vouchers. Companies like 'one4all' have made a huge success by allowing customers to give a gift voucher that can be redeemed at multiple outlets throughout the country.
The gift voucher allows for significant flexibility, particularly if you are not sure what gift to choose. For any business that sells vouchers, there's a great sales opportunity to promote these, particularly around seasonal times of the year such as Valentine's Day, Mother's Day or Christmas.
I see some retailers miss that opportunity by just having a little sign beside the till apologetically announcing that gift vouchers are available.
It is something that should be shouted from the treetops and customers should be encouraged to avail of the opportunity.
What may change is the format of the vouchers issued, as more and more retailers move to electronic voucher cards that allow the customer to only use a portion of the voucher on one particular trip.
I also see huge growth in people gifting 'deal vouchers' from the online deal companies. The advantage to the purchaser of the gift is that they are getting exceptional value, in some cases close to half the normal price, and to the person receiving that gift it's a great surprise.
In fact, in the right circumstances and with retailers correctly promoting their voucher options, I could see a combination of e-vouchers and traditional vouchers growing over the coming years as the trend of allowing people to choose their own gift grows.
QI manufacture a food product and I'm very close to signing a deal with a large multiple dealer in the UK. While I'm excited, I am also very nervous as this new customer will increase my sales by 100pc. Can you offer any advice?
Congratulations! That is fantastic news. Export is critically important for many Irish food producers and for some it represents the majority of their sales. Like any new piece of business, this will bring its own set of challenges and obstacles.
First and foremost, you need expertise on your team. You don't mention anywhere in your letter that you have spoken with Bord Bia.
They have a UK office and an expert team who have an indepth knowledge of the UK market place and all its key retailers.
Next you need to get a good understanding of dealing in sterling. While currency rates are currently favourable for Irish exporters, this is an area that you need to build up expertise in as there are several different options where you need to pay in sterling.
A relatively small business was telling me recently that they were buying a significant amount of sterling from their local bank but found if they contacted the head office of the same bank they could get far better rates.
The business culture in each country varies slightly and I'm sure you've discovered this in your initial contacts with your new customer.
Make sure you're well informed about any cultural business differences and, in particular, what the style of the buyer is with the retailer.
After all, you want to have a relationship with this company for many years or possibly decades so you need to keep up to date with what they are doing.
There are lots of free, online daily newsletters like 'The Retail Bulletin', which monitors new initiatives taken by the UK multiple retailers and it would be a good way for you to get to know your customer.
You also can't beat doing tour visits; and while I'm sure you have been into some of the shops already, you need to routinely visit a number of shops in that company every three months so that you keep up to date with new changes within that retailer's business and specifically in the category you will be supplying.
So many times in Superquinn, we had really great presentations from new suppliers, only to find out they hadn't even been into the shop before the buyer meeting and were out of touch with what we were doing. Needless to say, in most cases the buyer simply didn't list them.
The most important advice of all would be to create now an ongoing plan as to how you are going to manage that new account.
Your work is only beginning now. Have you planned your promotional calendar for the next year?
Have you agreed a series of quarterly review meetings with your buyer so you can review progress on the sales?
Is there any opportunity for you to generate PR in this new market? Have you looked at other retail and food service opportunities within the UK market so that you can leverage your newfound route to market?
The only challenge in having one very big customer like this will be that you become over-reliant on them, so it will be important that you seek out another large customer to keep that balance correct.