Sales Promotion: The Key to Increasing Sales
Contents
Definition of Sales Promotion
Sales promotion is a set of marketing actions aimed at temporarily increasing demand and sales. These actions often involve financial benefits for consumers, such as price reductions on products, free shipping, or the chance to win a prize. For example, the company Mixit holds promotions related to Halloween, highlighting the relevance of time-limited offers.
Differences from Advertising and PR
Sales promotion has a clear goal — to increase sales, while advertising can serve other functions, such as enhancing branding and engagement. For instance, advertising may aim to familiarize consumers with the company or attract traffic to the website. Unlike PR, which focuses on building long-term relationships with customers, sales promotion concentrates on short-term results and activates interest in products through time-limited offers.
Goals and Objectives of Sales Promotion
The primary goal of sales promotion is to achieve a temporary increase in sales volume. However, the strategy may also include several other objectives:
- Creating demand for new products. For example, a sour cream manufacturer may launch a "Buy One, Get One Free" promotion to draw attention to a new yogurt.
- Maintaining competitiveness. In case of declining demand among competitors, a prize draw can be organized.
- Building customer loyalty. Even without competitor promotions, a brand can launch its own campaign.
- Clearing out inventory. Discounts on products nearing their expiration date can help avoid losses.
- Attracting new customers through promotions for new users.
- Stimulating sales in the off-season, for example, through buyer promotions.
- Gaining the trust of sales representatives through favorable supply conditions.
Types of Sales Promotion
Sales promotion is divided into two main types depending on the target audience:
- Trade Promotion — aimed at intermediaries, such as distributors and dealers. This can include discounts, free samples, or contests.
- Consumer Promotion — directed at end consumers and includes various methods that help increase the number of customers and enhance loyalty.
Methods of Sales Promotion Among Buyers
Among the most effective methods, the following can be highlighted:
- Discounts: temporary price reductions stimulate demand for new products.
- Gifts with Purchase: free products when a certain order amount is reached.
- Promo Codes and Coupons: promotions for new and regular customers can increase order volume.
- Free Shipping: an attractive offer for buyers, especially for new customers.
- Giveaways: contests and prizes to attract a new audience.
- Bundle Offers: special sets of products to increase the average receipt.
- Flash Sales: short-term promotions offering significant discounts.
- Charity: a portion of sales revenue is directed to charitable causes.
- Free Samples: giving away samples or tastings of new products.
- Cashback: returning a portion of spent funds, which encourages repeat purchases.
Sales Promotion Tips
To enhance the effectiveness of sales promotion campaigns, consider the following recommendations:
- Emphasize Urgency: create a sense of necessity for immediate purchase.
- Simplify the Purchase Process: offer installment plans or no down payment.
- Target Audience: conduct promotions for specific product categories.
- Active Promotion: announce promotions through all available channels.
- Maintain Base Price: avoid devaluing the product through constant discounts.
- Evaluate Results: predefine metrics to assess the success of the campaign.