You've heard that consumer and trade promotions are fun to run. So why do your peers raise their eyebrows when you mention you're ready to step into these venues for the first time? Do they know something you don't know?
They do if they know that while promotions may appear to be easy and enjoyable to run, they can be expensive to the point of costing_,_ rather than generating, money for your small business. To mitigate this risk, trust your promotions to the right people and closely monitor them every step of the way. If you follow these two tenets, you should have fun, expose your product to new consumers and make money while watching your promotions succeed as marketing strategies.
No matter which type of consumer promotion you're considering, your consumer promotion objectives are probably aimed at:
- Stimulating sales in a hurry;
- Attracting new customers; and
- Gaining an edge over your competitors.
You have many consumer promotion examples to choose from, but three of the most common – and some best practices to follow – include the following:
- Discounts that are linked to a holiday, season or rite of passage (such as back to school) appeal to consumers' love of bargains.
- Best practices: Even big discounts can elicit big yawns if they spark skepticism in consumers. Make sure yours are meaningful and attractive and don't occur too often.
- Consumer research shows that the most successful flash sales are short and offer additional incentives early in the day.
- Best practices: Create a sense of urgency, but not before promoting your sale on social media. Doorbuster deals could sweeten the pot, too.
- Make the day of certain customers by sending exclusive online coupons.
- Best practices: Making a deal legitimately exclusive is the tricky part, but it's crucial unless you want to trigger a public relations crisis. For example, you may want to send coupons only to disgruntled customers you want to lure back or to customers whose children are off to school for the first time. Knowing that their turn will come helps pacify jealous customers if word gets out.
Whereas consumer promotions speak directly to consumers, trade promotions are directed at retailers or wholesalers. With so many businesses competing for limited shelf and floor space, they need incentives, too, or so the argument goes.
Three of the more common trade promotions – and some best practices to champion – include the following:
- Call them salespeople, if you like, but demonstrators who can strike up friendly conversations with consumers, speak intelligently about a product, explain its features and benefits and answer questions can hold the key to closing sales.
- Best practice: Put your best people in the hot seat, even if they balk and make a strong case for staying in the office. They may respond to an incentive of a different kind.
- Even the most articulate demonstrator can benefit from putting a product in someone's hands and saying, "Here. Try this for yourself." There's no better way to introduce your product to new customers and get people talking about it.
- Best practice: Giveaway costs can add up fast, so consider bundling (buy one, get something else free). Don't be afraid to stop a promotion early. You can create lots of positive buzz by publicizing that demand for your product was unprecedented, and you ran out. It happens.
- Retailers and wholesalers respond to incentives, too, and a game or contest could compel them to push your product. Alternatively, they could look the other way.
- Best practice: Talk to them yourself and find out what pushes their buttons. Sometimes a simple contest that pits people from two stores in the same community against each other can spur more interest than the payoff itself.
The great thing about consumer and trade promotions is that they usually involve soft learning curves, meaning that you'll learn – fast – what consumers respond to.
Grease the curve by keeping daily, not weekly or biweekly, tabs on your promotions. Then, don't be surprised when you see great gains in your sales totals.