No matter how prosperous your business is, there will come a day when you want to increase sales.
What is the best way to do this? Simple: Run a Sales Promotion Almost every business you’ve ever heard of has run a sales promotion. Exactly what they are, their pros and cons, the different types of sales promotions available (with examples), and five tactics to ensure your promotions are a successful part of your sales plan are all covered in this article.
I promise that by the end of this guide, you’ll be a sales promotion ninja. An effective plan, right? So let’s go!
How do sales promotions work?
A sales promotion, sometimes known as a “promotion”, is a marketing tactic in which companies offer exclusive offers to generate interest in their goods and/or services for a predetermined period of time.
Have you ever been grocery shopping and seen a “Buy One Get One Free” or “BOGO” sign above the ice cream?
You’ve no doubt seen your favorite clothing retailer post something like “Everything 50% Off – Today Only!” while scrolling through social media. A sales promotion, like that, or have you noticed that a software vendor offers a 14-day free trial? Yes, this is a sales promotion!
In fact, there are a variety of promotions, which we will discuss shortly. Each of them aims to spark curiosity, generate a sense of urgency, and most importantly, increase sales for the organizations behind them.
Sales Promotions: Advantages and Disadvantages
What justifies your company’s use of sales promotions?
Because this has numerous advantages. However, there are also some negative aspects. Let’s discuss the pros and cons of sales promotions so you can determine if they’re right for your small business.
Why sales promotions are good
- Sales promotions could be a great strategy to generate new leads. Think about it, even if a product sounds incredible, you may not be willing to spend full price on one you’ve never heard of. But if you could purchase that thing for 50% off or a 14-day free trial, wouldn’t you jump at the chance? You can start selling to customers again as soon as they accept the free trial or use the discount.
- More Sales: It involves more than just leads. In addition, promotions frequently increase sales. When your company offers discounts on its goods and services, it almost always sells more of both; Why?; because people like to save money! This has scientific support. People who received a $10 voucher in one study reported being 11% happier than those who did not. Do you want to satisfy your customers and increase sales? Organization of sales events.
- Reduce risk: Preparing to introduce a new product soon? With well-thought-out sales promotion initiatives, you’ll sell more products, increasing the likelihood that your new product will be successful. To make room for fresh shipments, you need to get rid of any unsold goods, your excess stock will disappear if you run a sales promotion, helping you recover the cost of goods. You will reduce the company’s risks in both situations.
- Greater Loyalty: Are you familiar with the statistics? Acquiring new customers is 5 times more expensive than keeping your current customers. Additionally, a 5% increase in customer retention can increase business profitability by 25% to 95%. Sales promotions have a reputation for increasing customer loyalty. With a limited-time offer, BOGO offer, or other promotion, you can stop your current customers from buying from your rivals.
- According to Customer Insights, data is the lifeblood of modern business. When you have access to crucial metrics, you can improve your company’s decisions and drive growth. You can use the data points provided by different sales promotions to improve your items, improve your marketing initiatives and change your sales tactics. More success, happier customers and shorter sales cycles are the results.
Disadvantages of sales campaigns
- Sales promotions can unfortunately devalue brands. Customers might assume that if a clothing company, for example, is offering discounts on a certain brand, they have trouble moving their inventory. Additionally, recurring sales can also have a negative effect. Customers may begin to believe that your goods and/or services are of poor quality. Why else would they constantly sell at a discount? Speaking of costs…
- Price disputes: Consider your favorite snack. It could be a bag of chips from Krogers or a cookie from the neighborhood bakery. Let’s say, for the sake of argument, that you consistently pay $3. Imagine walking into the store and finding out that your favorite delicacy has gone up in price to $5. You would be disappointed, right? possibly even angry Your customers won’t want to pay full retail if they get used to spending less ever.