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Can a sales promotion make a difference?

Buy-one-get-one-free, free gifts, free samples, vouchers and coupons. Are they old fashioned or do they have a place in today’s sales and marketing strategies?

I was talking to a client the other day: big company, clever people. We were brainstorming a strategy to deal with a large competitive advance. I raised the subject of good old-fashioned sales promotion. Lightbulb moments happened and the strategic director of marketing agreed that a carefully considered sales promotion would absolutely do the job. Problem solved. ‘’Why hadn’t it been thought of before’?’ was the sentiment in the room.

Sales doesn’t have to be quite so complicated. In this digital world where our attention spans are the size of a gnat, we are constantly looking for the next ‘new thing’ and competition is rife. The old-fashioned sales promotion techniques are proof that sometimes the simple and traditional ways still do work, albeit with a new and exciting slant. We see examples of it working in the real world daily from my buy-six-get-one-free morning coffee, to the car wash, to recruitment deals, discounts on technology to school uniform sales. Sales promotion principles are playing a large part in raising product and brand awareness, boosting sales and therefore enabling business growth. Some things haven’t changed.

Sales promotions are generally short-term offers, designed to re-ignite customers or draw in prospects that wouldn’t usually be loyal or shop with us at all.

Why sales promote?

Successful sales promotions can:

  • Stimulate stock movement with a short-term volume lift
  • Recover lost market share to competitors
  • Secure marginal buyers
  • Speed up or finish a slow moving line
  • Increase penetration of new or existing products
  • Avoid uneconomic production runs
  • Attract customers to your premises, location or website
  • Obtain retailer support
  • Boost sales in particular geographic areas
  • Draw attention to a new product range
  • Increase usage and reward repeat purchasers
  • Communicate with prospects
  • Re-ignite and motivate distributors, agents and resellers
  • Even reward your sales force.

Different types of promotions

In Australia, price promotions make up around 90-to-95 percent of all promotions. These are short-term discounts designed to stimulate sales. They revolve around the fact that we are becoming far less brand conscious and are more heavily influenced by price or a sense of bargain. It’s about lowering your products or services price by a very significant percentage to attract more customers and entice customers to purchase more products/services.

Dangers and risks

One of the main horror stories is not having enough product or resources to fulfill your offer. So beware of hastily thought through and untested promotions for your product or service which are implemented to increase the rate of sales but can’t deliver in the long term: not great brand building.

With increasingly savvy consumers, customers are clever and an extended sales promotion campaign can result in them binge buying and then falling off until the next and better promotion becomes available. I do this with make-up and skincare and rarely pay full price because I don’t have to.

Latest trends

Although sales promotion specials are still advertised in newspapers, mailers, on television and on-site at local businesses, we are seeing a greater uptake of coupons, discounts, buy one get one free (BOGOF) competitions and finance deals.

With the move to social media and increased use of mobile phone apps, Twitter and Facebook, we are more likely to integrate social media and internet advertising to sales promotion advertising, while advertising in the more traditional media is declining. Consumers now have access to a mobile resource constantly updated with specials and opportunities.

As we demand more for our dollar and are more astute at assessing the real value of an offer, we are also less likely to spend money upfront to unlock a reward later.

What are the different types?

Sales promotions are varied and often original and creative. They include

1. Buy-One-Get-One-Free (BOGOF)

2. Customer Relationship Management (CRM) incentives such as bonus points or money off coupons.

3.  New media e.g. websites and mobile phones that support a sales promotion

4.  Merchandising additions such as dump bins, point-of-sale materials and product demonstrations

5.  Free gifts e.g. Subway cards offering stickers towards buy six subways and get one free

6. Discounted prices e.g. budget airlines emailing the latest low-price deals

7.  Joint promotions between brands owned by a company, or with another company’s brands

8.  Free samples (AKA sampling) e.g. tasting of food and drink at sampling points in supermarkets.

9.  Vouchers and coupons often seen in newspapers, magazines, supermarket receipts or on packs.

10. Competitions and prize draws across all media

11. Cause-related and fair-trade products that raise money for charities.

12. Finance deals for example, 0 percent finance over three years on selected vehicles.

Good old fashioned coupons and dockets

While research is showing that daily deal websites may have peaked, we are seeing the overall use of coupons, particularly online coupons continuing to grow – as long as the offer they carry represent real value and uphold the old axiom: What you see is what you get. 

The original coupon company Shop A Docket is still going strong after 25 years in the Australian advertising space and Bob Jurkschat, GM marketing, explains: “Why do our local marketers choose to invest with us? Because we answer three very real and pressing challenges they face:

  1. Advertising wastage
  2. Lack of transparency and
  3. The constraints of having to share channels with competitors.”

Shop A Docket promotes added value deals you can highly localise via a market distribution and online platform, soon to include mobile. Jurkschat puts the Shop A Docket channel success down to five key elements:

  1. Highly targeted to local and relevant shoppers
  2. Measurable (coupons must be redeemed and clients can measure their ROI)
  3. Transparent (no ambiguity, what you see is what you get)
  4. Close to the consumer (with increased shopping frequency your brand can be in their hand 2.6 times a week, which is the average weekly visiting pattern)
  5. Exclusive (you will be the only business featured among your competitors, with a limit of one offer per category. One mechanical offer, one gym offer and so on).

Push, pull and a combination of the two

A ‘push’ sales promotion involves ‘pushing’ distributors and retailers to sell your products and services with promotions and personal selling efforts. A ‘pull’ sales promotion strategy focuses more on the consumer instead of the reseller. A ‘combination’ sales promotion strategy is just that; a combination of a push and a pull strategy. It focuses both on the distributor as well as the consumers, targeting both parties directly. It offers consumer incentives side by side with dealer discounts.

Want your customer to behave in a certain way? Invite them to with a sales promotion offer!

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Sharon Williams

Sharon Williams

Sharon is a pioneer in the Australian marketing industry and is the CEO of one of Australia’s highest profile integrated, B2B marketing, PR and creative agencies; Taurus Marketing. Sharon is a highly experienced International public speaker and trainer and sits on a number of prestigious boards. Sharon’s ‘no bull’ approach will be reflected in her blog, with frank commentary on a variety of topics.

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