How you use Sales Promotions in your business plan will depend on what type of product or service that you are offering.

A Sales Promotion is any form of promotion that is offered as an incentive to make a purchase. For example, you are walking through your local supermarket and you know that you need to purchase some dishwashing liquid. When you arrive at the products, you see another competitor to the brand you usually buy offering 20% extra for the same price. As such, you decide to buy the different brand this time, as you get more value for money.

You have been seduced by a Sales Promotion. By offering you more product for the same money, as a special offer, you were enticed to buy. Now, it is up to the product quality to keep you as a customer.

Another example of a Sales Promotion is a coupon. Sometimes you see them on the back of packages or in newspapers. It is another incentive to you to make a purchase on a particular product. Other examples include contests and sweepstakes, and the all-to-popular taste testing. This particular strategy is very effective with hot food, and can encourage many customers to make a purchase based on the smell alone.

Types Of Sales Promotions

To help you get started, here is a list of some sales promotions you run, and some times during the year you might run them.

Dates/Events

  • Christmas Sale
  • Easter
  • Mothers Day
  • Fathers Day
  • The Company birthday
  • First Day of winter
  • First Day of spring
  • First Day or summer
  • Valentine’s Day
  • New Year Sale
  • Independence Day/Australia Day, etc sale
  • Your First Baby Sale

Types of Promotions

  • Giveaways
  • In-store displays
  • In-store demonstrations
  • Sweepstakes and contests
  • Coupons
  • Rebates
  • Samples
  • New product launch
  • New service launch
  • Loyalty programs
  • Celebrities visiting your place of business
  • Value-added purchase

It is important to note that a Sales Promotion is a short-term strategy, and should only be used to help launch a new product or service into the marketplace, or to help increase sales during a quiet period.

Because the nature of a sales promotion is to make a purchase of your product more appealing – provided the customer takes you up on the offer immediately – this has an affect of weakening the brand. Over time, this will affect your market position in the eye’s of your customer, which will not support long-term growth.

A good example of this is a furniture shop that continually runs a sales promotion giving away a coffee table with a lounge setting. After a while, you begin expecting the store to have these specials and giveaways, and are happy to wait until they do, instead of making the purchase when the sales promotion isn’t being run. Basically, Sales Promotions say “Buy it Now“.

Planning Your Sales Promotions

Your first step in this process is to decide on what types of promotions you want to run, and when to run them. You should only run one promotion at any given time. The reason being is that you will need to track the performance of the promotion, and see which one worked best and what the results were. Here are some questions that you can ask yourself that may spark the brain-storming process:

  1. What products can I bundle up together and sell as a pack?
  2. Can my supplier provide me with extra product at the same price (i.e. in a different package, such as a 20% extra)?
  3. What prize would my customer want to win – a holiday, car, sport tickets, etc?
  4. Can my customer taste or try out my product in the store/shop/place of business?
  5. What long-term benefit can my customer get from me by becoming a loyal customer (i.e. loyalty programs)?
  6. Can I give away any samples of my product/service to my customer when they purchase another product from me?
  7. Does my price give me any margin to run a discount sale for a limited time?

Have a brainstorm about what incentive would attract your target audience to buy from you instead of your competitor. Will it be a give-away? A free offer with a purchase? A buy-1-get-1-free offer? Use these questions to come up with at least 5 different Sales Promotion strategies that you can implement in the next 12-18 months in your business.

You can chose to run your promotions when your competitors are running theirs, slightly before (if you know), or slightly after. Many of the supermarkets actually run very similar promotions, within a week or so of each other. Also, if you know when your business is or will be quiet, plan your promotions for this period.

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