Sales promotion is a technique that helps companies both big and small attract customers and boost business. This technique pulls customers in to make them realize the importance of the product promoted. The central character in the success of every business is the customer. These are the people who buy products and if all goes well, recommend them to people bringing in more customers. However, in today’s world, the competition is so intense that some businesses die out in their infancy.
We will walk you through the basics of sales promotion and how to use it to rocket your business to success.
Sales Promotion Definition
To put it in simple terms, sales promotion include techniques aimed at increasing consumer demand. It is one of the key elements of the promotional mix. Most companies use this technique to promote new products in order to garner the attention of customers by offering discounts or other great deals. Moreover, the technique encourages retailers and distributors to trade in the product, which in turn increases the overall profit incurred.
Though offering discounts and deals may not offset your costs right away, there is nothing like word of mouth to sell a great product. Nowadays, that means them posting your product on social media because they got such a great deal and just love it. There are two main categories of sales promotions, next, we will cover those.
Types of Sales Promotion
These sales promotion techniques can be broadly classified into two categories, which are:
Consumer sales promotions
The end user of the product is the focal point in these techniques. The customers are at the center of the promotion marketing. These techniques include offering discounts on new products or offering samples for free to gain valuable feedback from the customer. This technique results in either increased sales or increased awareness about the product and its availability.
Trade sales promotions
Traders, retailers, and distributors play a crucial role in the sales of a product. In order to motivate traders and retailers to opt for a particular product over the others, trade sales promotion comes into play. The most basic strategy includes offering retailers and distributors discounts for achieving a particular sales target.
The terms promotional marketing and sales promotion go hand in hand. Promotional marketing uses strategies to create awareness of the discounts and encourage consumers to buy the company’s product while it’s on sale. Promotional marketing techniques intend to create brand loyalty and counter competition.
A promotion strategy can be put into action in the following forms:
A physical promotion marketing strategy involves promoting a product in a physical environment. Concerts, festivals, and trade shows make excellent platforms for marketing products. In addition, many companies hire a celebrity or a famous face to promote the product and participate in such events. This strategy results in an immediate sale of products.
Using traditional media to promote products
Traditional media has been a handy source of promoting and boosting revenues ever since the marketing industry has been in existence. Companies use newspapers, television, magazines, radio, and outdoor media to promote products and increase sales.
Since the inception of the internet, everything from a person to a product can be marketed online. Many companies have learned to efficiently use social media and networking to boost their revenues and sell their products. In addition, this enables them to gain feedback from the consumers and interact with them, which helps them improve and enhance their product.
Innovative Promotion Ideas
Here are a few promotion ideas that many companies utilize to increase awareness of their brand or sell more product:
The most basic and easiest to implement sales promotion is offering discounts on products. Every store, be it a physical entity or an e-commerce platform, aggressively markets products by selling them at a price lower than the listed price. As discussed earlier, companies can offer these discounts directly to the consumers or to the traders and retailers. In either case, the strategy helps in increasing revenue and stimulating product demand.
It also increases the probability that customers will come back to your store for future purchases. In fact, customers are likely to view a free promotional item as worth even more than it would be if they paid for it. that means the cost of free may actually be an increase in your bottom line.
Another easy-to-implement and effective technique to boost sales is offering gifts to the customers. People like to purchase products when they anticipate winning gifts in addition to getting the product. Another variant of the strategy is offering assured gifts to the customers. In this case, the customer is sure to receive a gift after making a purchase of a set amount. Festive seasons are the best period to implement such schemes. This is the best time to promote new products and increase sales.
Incentives are always sweet, whether people get them at work or while shopping. Coupons are a way to offer products at a discount to the buyer. This helps the company tackle competitors and promote the purchase of products. Some companies release coupons when they first launch their business in the industry. This helps them generate brand recognition and promote their products.
This technique empowers consumers to buy products, even if they don’t have the money in hand. Financing companies offer to pay on behalf of the customers who can have the product immediately at the cost of paying monthly installments. Consumers can opt for financing options rather than paying the whole amount upfront, which gives them purchasing flexibility. Moreover, financing helps liquidate costly products faster.
Companies can introduce new products to the market using the sampling technique. In this promotion strategy, customers are invited to try products like perfumes, deodorants, and foods for free. This leads to an increase in product awareness and brand value.
Products are sold together based on their complementary nature and the technique is known as bundling. This is a unique way to promote sales of more than one product. The cost of the bundled product is lower than the combined price of the products if bought individually. For example, a bottle of shampoo and conditioner, a set of shirt and pants make for great bundled products.
Contests and games
Contests and games are a fun way to promote sales and create awareness about a retail store and its products. Stores can invite consumers to participate in games and contests when buying products of a certain brand or from a certain store. Additionally, with the internet coming into play, online contests have become quite popular. Businesses can efficiently promote and market products using games and contests. Exchange offers, exhibitions, email marketing, trade shows, and free trials are other promotion techniques to encourage sales and market brands.
The Impact of Sales Promotion
Sales promotion can impact a business’ revenue and increase the demand for the products. Strategies based on facts and scientific data are published in the International Journal Of Economics and Management Sciences. The benefits of sales promotion include:
Helps small businesses go toe-to-toe with giants
There are a lot of established companies in every domain, which can make starting a new business quite tricky. However, sales promotion offers new brands and small companies a chance to face the giants in the business. New and blooming companies can use promotional marketing strategies to lure customers to their products. This can help them gain regular shoppers and create brand awareness.
Selling multiple products in a go
Packaging or bundling products together and offering them at lucrative prices creates cross-selling opportunities. This leads to selling multiple products rather than just one. Moreover, cross-selling can be promoted by bundling products around a specific theme.
Helps customers make a quick decision
Limited period offers create a sense of urgency among customers. The sense of scarcity, coupled with proper marketing depicting the benefits of the product, can help increase sales and demand for the product.
Creates an inflow of new customers
Retail stores always have regular customers buying items from them. By offering promotions, these regular customers could gain the store new customers with their word-of-mouth. With this in mind, retail store owners have an opportunity to convert these customers into regular ones by offering the best services.
Creates opportunities for training staff
Organizing sales promotional events leads to the company’s staff interacting more frequently with customers. This creates an opportunity for them to improve salesmanship and helps them understand customer needs while handling a range of different situations.
Gives the company a chance to experiment
Companies often have innovative ideas about marketing their products or introducing a completely new product in the market. Promotional events offer the companies a limited period of time to experiment with their ideas and closely study the outcome. They can further use the data in the future to their benefit.
Enables company to gain invaluable feedback
Sales promotions enable companies to interact with the end user and gain a better understanding of their needs. This leads to enhancements in products based on user requirements, which ultimately leads to a spike in sales revenue. Moreover, this enables companies to understand customers perception of the product, allowing them to base future campaigns on those perceptions.
Sales promotion is an integral part of every business, whether big or small. These techniques are necessary in today’s competitive world of marketing and selling. They also help customers identify the best products in a particular category and access any new products or discounts during promotional events.