In this blog post I am going to analyze the ways that sales promotions are considered effective and utilized by companies. This analysis comes from an internet article from Entreprenuer.com that references the three steps to formulating a competitive and effective sales promotion. The three sections are to target your effort, plan your incentives, and know what your objectives are prior to setting a sales promotion up.
When talking about how a company can target its efforts it is trying to overcome the problem of having to broad of aim for a promotion. Most promotions can either drive sales from established customers, bring in new customers, draw customers from competitors, change purchasing patterns, and stimulate business during down times. It is very difficult for one sales promotion to accomplish all these tasks so it is key for a company to pick one or two to focus on and this will allow them to have a much more focused and direct sales promotion that will reach a specific consumer.
Also, promotions can come in many different forms ranging from price savings, trial offers, and event or experience activities to increase crowds. It is important to think of specific factors around these incentives such as having price savings that are compelling enough to the consumer and also allow your company to still maintain profits. To create worth while trial offers, companies need to turn sampling into promotional events, similar to what Costco does on weekends with their free samples with products available right their for purchase. Finally, hosting events can be a great way to bring in new customers as well as cater to existing customers. They were best when they are partnered with a product presentation or launch to generate buzz for the company.
Probably the most important part of a sales promotion from the company’s perspective is knowing what the goal of the promotion is. It comes down to setting SMART goals, ones that are specific, measurable, achievable, reasonable, and time based. This will help set the way you offer the promotion while at the same time affecting the business’s bottom line.
To see more about my views on sales promotions, follow me on LinkedIn: Mike Barclay as well as following me on Twitter @mike_barclay
To view this article in its entirety: