Why Is Promotion Important for a Business?

Your business is doomed if nobody knows it exists. Promotion, advertising and publicity can all make potential customers aware of your brand in different ways. Ideally, you can combine all three to let consumers know you're there and that you're better than the competition.

TL;DR (Too Long; Didn't Read)

The importance of promotion and advertising is that they make potential consumers aware of your company and the benefits of doing business with you. Where advertising focuses on growing sales, the importance of promotion strategy is that it builds customer awareness. Advertising is a part but is not all of the strategy.

Importance of Promotion and Advertising

Publicity, advertising and promotion all make people aware of your brand, but they're not identical.

  • Advertising draws attention to your products or services with the goal of boosting sales. Commercials, newspaper ads and online ads all fit into this category.

  • Publicity spreads news about your company, often without you paying for it. A great Super Bowl commercial is advertising, but if people who see it tell their friends how funny it was, then that's publicity.

  • Promotions raise awareness of your brand and draw customers' attention — for example, by sponsoring a trade show or giving away free samples. Whereas advertising tells consumers to "buy now", the nature and importance of promotion is that it says, "we're here and we're awesome!" Increased sales hopefully follow.

The three tactics do overlap. A successful promotion strategy often relies on advertising as well as publicity.

Nature and Importance of Promotion

The nature of promotion is that it's usually offered for a limited time. If you're launching a new soft drink, and you offer a free case to anyone who buys the classic variety, that deal won't last forever. After you introduce people to your new product, you want them to start paying for it.

Likewise, setting up a special event to promote your company is usually a one-shot deal: a concert, a sporting event or a sweepstakes. That makes it different from advertising campaigns, which often run for months.

The importance of a promotion strategy depends on your objectives. Promotions can accomplish several different goals:

  • Boost brand awareness.

  • Convince people to try a new product at least once.

  • Provide information. If your product is new, promotion can make people aware of its benefits and why it's better than the competition.

  • Increase customer use. Frequent-flyer programs are an example of this kind of promotion. A traveler who uses Delta or American Airlines over and over can qualify for free flights down the road. Using a credit card tied to the airline gives customers more miles.

Importance Of Promotional Objectives

Before launching a promotion, you need to be clear on the results you want. The importance of promotional objectives is that they determine the kind of promotion you need.

  • If you want to build brand awareness and increase word-of-mouth publicity, a big, spectacular eye-catching event or a charitable donation might be the best tool.

  • If you have a product that isn't selling, packaging it together with a successful product in a "two for the price of one" campaign has advantages.

  • To encourage customers to try a new product, rebates or "complete refund if you're not satisfied" campaigns may prove effective.

  • If your goal is to gather more information about your customers, a promotion that incorporates a website visit can be useful. To claim the rebate, customers log in and provide their email address, for instance. Then, you can contact them later by email with more offers.

The important element of your promotion strategy is that it ties in with your objectives.

Some Promotional Challenges

Any advertising for the promotion has to meet the legal requirements of all your ads, such as not breaking truth-in-advertising laws. There are also some special difficulties when staging promotions:

  • Rebates have to comply with state law — for example, the design of the form.

  • Rebate fraud is a common problem. You'll need to watch for counterfeit forms and other scams.

  • Sweepstakes and contests are also subject to government oversight to ensure you don't cheat the contestants. You have to be very clear about the rules and the privacy policy and not trip up winners with technicalities.

References

About the Author

Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com