Promotions form part of a companies' marketing strategy and are used to advertise products and services, attract new customers and get loyalty.
Most businesses use it to increase sales and attract more customers. Before carrying out a promotional strategy, you should make a well-defined strategic plan. It is not just about attracting bargain hunters, but you will also need to attract customers who end up sticking to your brand and become loyal customers. Therefore, we recommend doing a prior analysis on the interests of your target customers.
Below, you can find out everything you need to know about the most important aspects to consider when creating promotion strategies; main functions, objectives, most used promotion tools, benefits, etc.
Promotions have three main functions:
Inform of a promotion.
Remembering the brand.
It's basically about designing promotions that attract the customers that your business needs. However, some companies often create discounts only to get space for new products. Carrying out this type of promotions will surely attract many customers, but you will not attract those that are part of the target audience of your brand and that contribute the majority of income to your business. It is fine to create promotions to attract new customers, but you should not neglect the real customers of your business. That’s why it is important to have a good balance of different kinds of promotions.
Through promotions, you can use psychological strategies to get into the minds of consumers and make it easier for them to buy.
The four main objectives for which brands usually create promotions are the following:
Free up storage space. It is very usual for brands to apply discounts on products that may have gone out of fashion or simply because they want to incorporate new products and need space.
Get more customers. Through promotions, it is possible to reach new customers so that brands can make themselves known. Carrying out these promotions will encourage people to want a product, and from there, they will discover the brand and become loyal customers.
Increase sales. Most often, promotions are applied to increase the sales of a brand. It's not only about increasing sales because promotions are also about providing an economic benefit without causing a very high cost.
Gain visibility. Promotions will help your business stay top of mind with consumers and increase brand visibility. It's crucial to work with the right strategies to add value for companies and customers.
Loyalty. Promotions are a good strategy to "thank" in some way those people who are loyal to your brand and buy frequently from your business. It’s also a way to get them to continue betting on your business. For example, in this type of strategy it is very common to offer special discounts to this audience, or offer discounts on their birthdays, or even give a discount at an unexpected time for products they usually buy, or for the best sellers.
Using the strategy of promotions for a business can bring real benefits. Some of the benefits of using this type of strategy are:
Discounts based on units
The first promotion means that when a person buys, for example, two or three products of a certain category or brand, they get one for free. There exist many different types of this discount.
Discounts prediction (pack)
It refers to the realization of discount packs of products related to each other. For example, if a person wants to buy a notebook for school, automatically appears a package with a notebook, pens, backpack, and markers. This option is cheaper than if the customer would buy all of the products separately. The consumer can decide whether he wants it or not. This is a good way for the eCommerce to increase the average order value for example.
It consists of giving a discount on volume, which means that the more a customer buys of a product, the higher the discount. For example, if 200 bags of sand are purchased, the customer will get a 20% discount. This type of promotion is very usual in a B2B eCommerce.
This type of promotion is based on certain conditions or rules that can be applied by the eCommerce, so that a discount is given if the customer meets the conditions. One of the promotions of this type could be, for example, to buy more than x products, to get the discount. You can apply it to any product in any category with the percentage discount you want to offer. For example, if the customer buys more than three sunglasses, he will get a 15% discount.
Brands offer free shipping on products purchased by users, but it is usually associated with a condition. For example, companies can offer free shipping on orders over x €. This message usually appears on the eCommerce home page and even in the shopping cart before finishing the purchase. In this way, users decide to pay for another product instead of bearing the shipping costs, so the store increases the average order value.
Discounts for sales
A promotion that you can often see in summer or winter. All products in a store are discounted for a specific period of time, for example. An example of this type of promotion would be Winter Sales, Black Friday, etc. It is also a good way to win storage space for new collections.
Discount vouchers or coupons codes
There are discount vouchers or coupons to encourage your target audience to be more likely to consume your product. For example, many brands offer discounts codes for the birthdays of their customers because of the information they have in their database. So, the brand rewards the customer with a discount voucher of 10% or 5 €. A lot of brands also offer discount vouchers to encourage users to subscribe to their newsletter, typically they offer between 5% and 10% discount.
This type of promotion does not require a super investment and it’s a good way to offer different discounts for each type of audience based on collected data from the eCommerce.
They are also known as loyalty cards. It is about offering a reward for customer loyalty to the brand. We can see it, for example, in clothing stores where they give several points according to the value of the purchase, and if you reach x points you can get some free product, discount or choose any garment or accessory of the brand.
In this way, the consumer feels the motivation to keep buying in the same brand to get a reward, and as a brand, you achieve customer loyalty. Another example that we usually see in many brands is that they offer their customers a % discount on special days such as a birthday.
Free Gift Products
Brands often choose to give free samples or gifts of a new product that they launched on the market. This is seen a lot for example in cosmetics or some luxury brands where consumers buy products of high value. It’s a good way to show appreciation but also to make your customers try new products.
Giveaways and contests
Currently, this type of promotion is very fashionable. Brands launch sweepstakes on their social media networks to publicize a product or even the brand itself. It’s a channel that reaches a lot of people that then have the option to share the publication, something that will increase the possibility that more people can be aware of your brand and remember it. It is relevant to carry out giveaways that interest above all the target audience of your brand, as they are the ones that bring a benefit.
Brands select influencers to increase their visibility, as well as to increase sales. Influencers often offer discount codes to their followers or offer sweepstakes collaboration with other brands, etc. It works very well nowadays because those influencers provide a high level of visibility.
Using promotions as a marketing strategy can add a lot of value to your brand and help you to achieve success, but it can also be detrimental if you don't make the right strategic plan beforehand.
As long as you set some objectives, define a target, and decide what kind of strategy you will use, promotions will always be a good option and a good investment for a company.
The goal is to get more customers, and consequently, more sales. And, it's also a way to satisfy your business' customers and allow them to thank them for their loyalty and participation.