What is sales promotion and what does it consist of? A sales promotion is a technique used by companies to stimulate and boost sales of a product or service at a given time (short periods or special dates).
Some of the most important purposes of sales promotion are:
- Increase sales in the short term
- Getting a new product introduced
- Attract customers from the competition
- Reduce or eliminate product stock
What are the pros and cons of sales promotion?
Among the most important pros and cons when launching sales promotion actions we find:
- You can reduce your margins (difference between sale price and production cost).
- You can attract the wrong audience. That person who has bought for the discount and you are not going to be able to retain it in the long term.
- Drastic increase in sales.
- Approach new customers thanks to promotions that help create long-term relationships with them.
How to make a promotion in 7 easy steps
#1 Define the goal
Clearly define the sales objective that you want to achieve with this action. Remember that any sales action must always be supported by data. We cannot work without having previously made a forecast , nor having checked past results.
#2 Segment the audience
Define the public to whom the sales promotion will be directed. To all current customers, new customers, old customers, staff, partners, the distribution channel…etc.
#3 Make a budget
Set how much money you are going to spend to carry out the promotion: how much you can reduce the margin, what costs this promotion implies and how many sales you will generate if you carry it out. It is essential to make the sales budget to know exactly if, on the one hand, it is possible and, on the other, if you are going to make a profit in return.
#4 Select the type of promotion
Among the most used types of sales promotion we find:
-Temporary discount on the price of the product: For example, dates such as Black Friday, where great discounts are made, especially in technology.
-Greater quantity of product at the same price (such as 2×1): Type of sales promotion very common in supermarket chains to release stock.
-Discount vouchers or coupons: For example, coffee shops or bakeries use discount vouchers (for the purchase of X coffees you get one free) with the aim of building customer loyalty.
-Samples or gifts in the same product: Samples or gifts are very characteristic in perfumery or gourmet products in which it is important to try before buying.
-Sweepstakes or contests: Tool widely used today as a form of promotion on social networks. This type of sales promotion action helps encourage participation and fosters the feeling of belonging to a brand.
-Product presentation events (can be done between 2 complementary products with the same objectives): This type of promotion is very common in the hospitality sector. For example, a kitchen exhibition with the first product accompanied by the second, which would be a drink.
When choosing the type of sales promotion, always keep in mind the audience you are targeting and in what communication channels they are present.
#5 Define the clauses of the promotion and how it works
The easier it works, the better. The promotion of a product is a “gift” that you give to the consumer in which both you and he win, it is a win-win. Therefore, the way in which it communicates must be simple, and above all very visual. With the aim that the consumer understands it at first and does not have a bad shopping experience.
6# Launch the elements of the sales promotion
Based on the budget and hand in hand with the Marketing team, design the necessary materials to launch the sales promotion. Depending on the type of promotion you will need Paid media, merchandising, banners on the web, sending a newsletter… etc.
#7 Test, measure and check the results
First of all, before launching the promotion, test it internally. In this way you will be able to see if the objective and the means to reach it are correct. If not, correct it and test again. Once we have verified the promotion and launched it, we have to measure the data and analyze the results. It is the last step, but the most important. If we do not exhaustively monitor the promotion and check the results, we will not be able to know if it has been a success or a failure. If they have been positive results we can use it as a model, and if they have been negative we can correct errors.
How to make a sales promotion with a CRM
Regardless of the sector in which you work, or from where you are working, with a CRM it will be very easy for you to plan your sales promotions since they have modules specifically designed for it. For example, SalesCampaigns, a functionality that is used to plan any sales activity that you want your sales representatives to carry out (Incentivize a product, cross-sell with your client portfolio, discounts…). It is an easy, simple system that allows you to create campaigns and promotions in seconds. Within the CRM you select the duration dates, the type of promotion that the commercials have to carry out, you select the accounts and activate the promotion. Thanks to this type of system, you can track how the campaign is progressing, the activity of each commercial, and the results in real time. If you want to know more, here is a link to a video that explains step by step how to activate a promotion via the CRM.
Sales promotion is a useful and effective technique to stimulate and drive sales. But if it is not done correctly, it can lead to bad experiences in the consumer and you can end up losing existing ones and not getting new ones. I hope that this article has been of great help to you and that you can put it into practice in your sales promotions.