Promotions have been used offline for years as a marketing tactic and increasingly you are now seeing them appear as online tactics.
Two reasons to use promotions online or offline are:
Retain existing customers by providing additional value to their purchase
Expand on existing customers by providing an incentive to purchase more of your product or service (up sell) or purchase a different product or service in your range (cross sell)
There are many types of promotions you can implement, so here are a few of the common ones:
Price Discounts
A common type of promotion is discounting the price of your product or service for a limited period of time.
If you discount your price, you need to determine how much additional volume needs to be sold to cover the loss in revenue as a result of the discount.
Multiple Purchase Discounts
Another way of encouraging customers to buy more is to offer a discount if a customer purchases a certain quantity of your product. For example, buy 3 bottles of soft drink for $4.00 and save 80 cents. Multiple purchase discounts not only offer a saving for the customer and additional sales for your business, they assist in blocking out the competition for a period of time.
Sweepstakes
Sweepstakes or games of chance enable a customer to enter a competition where they go into the draw to win a specific prize determined by your business. Find out what your target market likes what their interests and behaviour are and then decide on your prize.
Contests
A contest is a game of skill rather than a game of chance and it is at the discretion of your business to decide who wins eg. colouring contest or “in 25 words or less..”.
Government laws are different for contests as opposed to sweepstake promotions so make sure you check the regulations.
Value Adds
A value add is when you provide a reward to your customers for purchasing your products or services. Value adds are often used to increase the average transaction value of a customer i.e. encourage them to buy more to receive the reward.
Premiums
A premium is a product you give away to your customers that includes your business logo or marketing message eg. mouse pads, caps, t-shirts, calendars etc. Premiums can increase awareness of your brand or business or act as a reminder for existing customers.
Coupons
Coupons can be used to communicate your promotional offer to your target market. More importantly, coupons provide a simple way to track the success of your promotion.
When developing a promotion that involves a coupon, you need to consider the following:
Who should receive the coupon, how will the coupon be distributed, what do you want the coupon to do and what does the coupon need to communicate eg. conditions.
Cross Sell and Up Sell
The objective of a cross sell promotion is to increase the average transaction value of your customer by encouraging them to purchase more than one product or service in your range.
Up sell promotions encourage customers to purchase more of the same product or service.
Bonus Packs and Multipacks
Bonus packs offer more of your product for the same price as the original size. For example, receive 500mls of shampoo for 375ml price.
Multipacks are the grouping of like products together to encourage customers to buy more. They are sometimes offered at a discounted price as opposed to buying each product individually.
What do you think of using promotions in your business?
[...] This post was mentioned on Twitter by Susan Oakes, Susan Oakes. Susan Oakes said: How to Keep Your Customers With Simple Promotions http://bit.ly/ctoUhZ [...]
Online, promotions have a huge potential. Since these is more to online marketing than just making the sale, the exposure and recognition that can be built out of a simple promotion can be valuable indeed.
Promotions don’t need to be expensive or time consuming either. Don’t forget, you can use sponsors to provide the rewards and pay them in parallel exposure. The hardest part is probably finding an attractive enough draw.
Paul Novak recently posted..You Do What
Hi Paul,
I think they have potential too and it is interesting that what is common offline is now moving online.
You are right about finding sponsors to provide the rewards and like any promotion a part of being successful depends on knowing what appeals to your customers.
Thanks for your comment.
Hi Susan. I see, by chance, that we’ve both covered similar ground in our respective posts today. Your ideas are ace, so I’ll bung a link to this post in mine. Trust YOU to be ahead of the curve! Best regards, P.
Hi paul,
Great minds think alike. I had more but the post was about 1,000 words so decide just to include a few that some may not be aware of.
I liked your story about the pub and for anyone wanting to read more here is the link: http://mybrc.myobnet.com/2010/08/17/black-bottle/
How to Keep Your Customers With Simple Promotions…
Promotions have been used offline for years as a marketing tactic and increasingly you are now seeing them appear as online tactics. There are many types of promotions you can implement, so here are a few of the common ones:…
GREAT suggestions to draw consumer attention. My question is how does one convey the offer? Many companies opt for daily emails which can be annoying. At the same time, a periodic email or website offer can get lost in the shuffle.
Keyuri Joshi (on the ball parent coach) recently posted..5 Parenting Pointers about Kids and Movie Ratings
Hi Keyuri,
It depends on what the promotion is, who it is targeted to and which way your customers respond the best. I know this is general but it really does depend on a number of factors. If you are just trying it I would test it perhaps with a small group and refine. One other thing is if you know your customers’ buying cycle then that can help you with the frequency of putting the offer in front of them.
Many of the promotions you mention are consumer oriented. One I like is to offer some incentive for referring new customers. It is a low cost way to acquire business you would not have had already.
Rob
Rob Berman recently posted..How Changes in Perception Impact Your Brand
Hi Rob,
I haven’t done that with referrals, but have heard people having success. How do you know what incentive appeals? If you can, it would be great to hear.
The incentive should be in proportion to the value of a customer. For example, if someone is referred for motor (auto) insurance worth $500 or 500 pounds with a commission of 15% for the insurance agent he would get $75 or 75 pounds per year. It certainly would be worth a one time $25 or 25 pound restaurant gift certificate. Even better would be a gift certificate to someone who is a client of the insurance agent. Think cross selling.
I actually suggested this exact scenario to a client.
Rob Berman recently posted..How Changes in Perception Impact Your Brand
Hi Rob,
Thanks for giving your examples and cross selling does work for both the business and customer. You make a valid point about value and customer.
Susan I love this post – full of ideas. I’m trying for the first time a little blog contest. Would you have advice of how to gauge results? My intention with the contest is two-fold – to get some buzz for a new eBook and to build attention to my blog.
I’ve seen most of the tactics you covered used online and offline. Are some more effective in one venue over the other?
Hi Patricia,
I think any promotion must be tied into sales or it could be if it is your blog, subscribers or if you have a newsletter subscribers to that. Creating buzz and awareness is part of the process but it needs to translate even in the medium term to something tangible.
Many of the promotions can just be used online although we are just seeing this happen. For example muliple purchase I think would work online as well as offline. It does depend on what you want to achieve. I know this is a general answer but there are a number of factors involved. Re your contest if you wan to discuss in more detail, just email me.
Thanks for your comments.
Good stuff ! I once gave away a book, “The prescription pill handbook” for every year long upgrade to our service….Unique and broad interest stuff works great !
Ted Bauer recently posted..Social Media Lessons From Smudgie at Target
Hi Ted,
Glad that your promotion is working for you.
Thanks for all of the suggestions. We have just started to do more promotions. We recently had a publishing promotion after a seminar. I like your suggestions to upsell or to package several services.
Do you recommend doing promotions with another company? for instance-sign up now for the publishing package and get a free web consultation from xyz.
Julia M Lindsey recently posted..Secret Regrets- What if you had a Second Chance – Book Review
Hi Julia,
How did the promotion go? Did you achieve the results you wanted? I have done a lot of joint promotions over the years and they can work very well for small business as they do for larger comapnies and brands. The key is to make sure the products or services being promoted together are compatable with each other, are complimentary and something customers would be interested in. I am not sure a publishing package and free web consultation works? Of course I could be wrong as I don’t know who you are targetting.
Both parties need to get something tangible out of it and that means talking to the other company and see what their objectives are so that it can be designed to be a win for all. Hope that answered you question, if not let me know.
Susan,
Great examples of how to add value to your customers buying experience. Everyone likes discounts, great deals and freebies. The premiums remind me of trade shows and everyone walking around with a bag of goodies from different booths. Having been on both sides of a trade show, I can recall some unhappy comments from vendors like “all everyone wants is the freebie – they don’t even stay long enough to hear my sales pitch”. So there is a good side and a bad side to freebies right? However, the value-add benefit has great potential.
Julie Weishaar recently posted..Super Sizzling Savings
Hi Julie,
Good example with the trade shows. I saw two vendors who used this, one effectively and the other missed an opportunity. I received a sample from one and they didn’t even ask for any contact details. The other gave the trial and on the spot put in contact details in their database so they could follow up which they did and I bought the product.
I think samples are a great idea and where possible you need to be able to follow up and not leave it to the customer to contact you.
How about buy 2 pay for 3?
Seriously, promotions work. We frequently buy say, a discounted cheese at the supermarket, even though we don’t need it?
Catarina Alexon recently posted..Saudi women – a force to be reckoned with!
Hi Catarina,
Good point about the supermarket promotions. They know that when shopping there will be impulse purchases made by consumers and they do work especially for everyday items.
Thans for your comment.
Great examples Susan. The only one I can think of that I don’t see mentioned is bundling your product with something free. People love the word free. Even offering free shipping can help make a sale.
Sherryl Perry recently posted..How Do Entrepreneurs and Sole Proprietors Juggle All Those Balls
Hi Sherryl,
Bundling with a sample or something free does work so thanks for the inclusion.
By offering special promotions that make our customers smile and feel appreciate, we build a sense of community and create loyal and raving fans.
Thanks for the fantastic examples Susan!
D’vorah
Hi Dvorah,
Great point about making your customers smile. if you keep this in mind as well as being appreciated I am sure more promotions would be successful.
Thanks for adding these points.
Excellent list of promotions. They mainly apply to companies selling products. What are your thoughts about which of these would be most effective for companies offering professional services?
Hi Jeannette,
Depending on the service I think you could do – premiums, value adds, mutliple purchases and cross sell and up sell. Of course the most effective depends on your customer base and understanding what they are more interested in which is the same for customers of products. It also depends on why you are doing it and the results you want. For example I often see professional service companies focus on single services at a time. You could bundle a few up and do a promotion to a segment of your customer base.
It is a good question and if you need more information just email me.