Sales promotions is an ideal way to invigorate consumer interest in a new or mature product. The method wields the power to retain a current customer, increase product usage, entice trial, and neutralise the competition’s efforts. However, it’s not always clear which is the appropriate method and mechanic to select.

Here, we will take a look at a variety of sales promotion ideas, and the advantages and disadvantages of each.

Coupon 

A price reduction offer – usually a certain percentage of the product. A note offering a specified discount/saving against a product or service.

Advantages

  • Direct price incentive to the consumer
  • Helps secure brand penetration by stimulating a trial
  • Rewards brand loyalty
  • Digital coupons reduce costs and can be distributed in an array of internet channels

Disadvantages

  • Delayed benefit to the customer as they may need to be cut out, then given in
  • Invalid redemption can cause issues
  • Time constraints cause retail staff to process invalid claims

Refunds and Rebates

Another sales promotion idea is offering your customer the opportunity to claim their money back, via BACS, cheque, gift cards, and
coupons. Try me Free / Money Back Guarantee – the consumer gives a statement of like or dislike.

Advantages

  • A typically high redeeming cash incentive
  • Data mining
  • Can be applied to a huge range of markets

Disadvantages

  • Open to exploitation; people redeeming regardless of their true opinion of the product
  • Monetary incentives are extremely popular, increased the likelihood of high redemption, creating a potential loss from the promotion

Cashback

The consumer has the opportunity to claim a certain amount back. For example, £50.00 back from a laptop purchase.

 Advantages

  • The flexible amount offered to the customer, so revenue still guaranteed from each purchase
  • Rewards customer for purchasing your product, and which in turn is an incredibly popular offer

Disadvantages

  • It can damage profit margins if the offer redeems much greater than expected
  • Very common promotion, making it hard to distinguish a brand and formulate competitive advantage

Money Off Next Purchase 

Purchase a product and receive a certain amount off your next purchase.

 Advantages

  • Digital coupons can reduce costs, and can be distributed in unique channels (social media, email, etc.)
  • If delivered via a flyer, it can be used as a tangible catalyst for the consumer to engage
  • Can encourage sales uplift

Disadvantages

  • Dependent on product nature/purchase frequency, when will they need to purchase again?
  • Delayed benefit to the customer

Gift-with-Purchase 

Receive a gift with the next purchase. This is usually sent via the post or given at the point of purchase

Advantages

  • Can be an immediate reward for your customers
  • If the item is collectable, it encourages repeat purchases
  • It can offer a wide range of items, making the product distinct and unique
  • Great opportunity for branding
  • Very shareable experience

Disadvantages

  • In and on pack GWP’s can interfere with high-speed production lines
  • Gift(s) may be costly
  • Variable costs such as post can excel

Sampling 

Some of the product/services are offered for free, at either a reduced volume or within a time restriction

Advantages

  • Great for new/improved brands whose quality outshines rivals
  • Very little effort on potential customer’s behalf
  • 8/10 consumers are more likely to buy something if they have tried it first

Disadvantages

  • Can be expensive
  • Ineffective if a competitor(s) have superior performance

Instant-Win 

Originally known as a sweepstake, this version is legal if no proof of purchase is required; and success depends entirely on the chance of a winning ticket

Advantages

  • Easy to administer
  • Consumers know quickly if they have won or not
  • Not all prizes will be claimed, so a larger fund can be offered

Disadvantages

  • Cannot be linked to a proof of purchase
  • Redemption levels vary heavily on distribution & the type of instant win

Collector Schemes 

Collecting a certain amount of items in order to be eligible for a prize/gift

Advantages

  • Ability to multi-tier gifts and offer great rewards
  • Real opportunity to develop brand loyalty and rewards existing customers well
  • Can be a self-liquidating promotion

Disadvantages

  • Can be exploited by pooling codes

Scratch Cards 

Cards with easily removable latex panels; usually contain a few games for the consumer to win

Advantages

  • Simple and exciting = effective
  • Highly adaptable, yet easily understood regardless
  • Easily used alongside other promotions

Disadvantages

  • Easily used across lots of markets, making it hard to stand out
  • Lots of legal constraints

Click 2 Win 

A click to win is an online promotion which simply requires consumers to click on the link detailed, to have a chance of winning the given prize/reward.

These often work as instant wins which are prize draws in which consumers know immediately whether they have won.

Advantages

  • Efficient
  • Traceable
  • Simple for the consumer
  • Can be controlled by a number of people who click
  • Can work with winning moments to control when a win occurs

 Disadvantages

  • Need to set up and host a web page
  • Can be costly due to high engagement

Winning Moments 

Where a winner is created by the time at which they participate in the promotion, according to pre-determined winning time slots or ‘moments’. This is often the most suitable and fair method of ensuring all the prizes are available to be won by consumers.

Advantages

  • Very controlled and calculated costs
  • Add realism – consumers believe they can win
  • Cheap to run
  • Lavish or unusual prizes can generate widespread publicity
  • Easy to manage

Disadvantages

  • Very common, hard to create a point of differentiation

Contests and Sweepstakes 

Competitions and sweepstakes can be a success when underpinned by various other communication methods such as social media.  Prizes can either allocated upon merit or randomly drawn, and often have big headline prizes.

Advantages

  • Actively engages customers; users upload content (a photo) to enter the contest, you can then have a poll out of a select few contestants, which further increases brand engagement
  • User-generated content resonates with other users more; alongside this, you gain insight into your customer base
  • Sweepstakes require minimal effort, increasing the number of people signing up

Disadvantages

  • If you do require  private user content to enter, the number of entrants will be less
  • Whilst sweepstakes are easier, the entrants may be less targeted

Price-offs 

A featured reduction in the price of a product/service. Usually between 10% and 20%.

Advantages

  • There is no risk with this style of promotion, as all costs are known in advance
  • No economies of scale (little and large companies can use this strategy)
  • Immediate benefit to the customer

Disadvantages

  • Can be expensive
  • Indistinctive and easily matched by competitors, can also force a price war

 

Leave a Comment

Your email address will not be published. Marked fields are required.