The underlying principle of promotions is to add value to a purchase and to direct marketing spend exclusively towards buyers, rather than browsers. A good advertising campaign will fill the shop; a good promotion will fill the till.
So apart from the overall aim of increased sales and profits, why promote? First is to sell off oversupply - classically, the January sales. Second is to bring forward sales with a buy now, limited offer. Third is to take custom from competitors. Fourth is to increase volume sales to achieve supplier bonuses. But above all, promotions give the customer a reason to buy, to buy now and to buy from you.
Promotions work because people like them. Getting money off, a free gift, or a chance to win something big and valuable makes them feel clever. They also work because they give you, the salesman, an added edge with which to close a sale and a tangible point of difference.
Let’s look at the nuts and bolts options.
Free
There are a variety of ways of running free offers, but a free gift with purchase is probably key. You decide, for example, to promote a particular high-margin product and give away a low-margin item with it. The eye gets taken by the total size of the offer.
Relevance is an important element in promotions, especially free offers. Aim to offer a gift with natural associations with the promoted item. You cannot give mothers, for instance, too many recipe ideas to get their kids to eat 5 A DAY.
Win
This is usually the weakest promotional format because we diffident Brits never expect to win and cynics assume that nobody gets a prize. However, it is cheap and the cost is fixed. Win promotions are either competitions or free draws. The former are based on skill and judgement, and can be related to a purchase. The latter are ‘name in a hat’, but cannot require a purchase. A proper, legal competition is the more complex to put together (entry forms and rules are required), but a free draw is valid for the small retailer.
You need to recognise what it can achieve; bods through the door. That, in itself, is valid, but you can do a bit more - you can require them to trial a product that you are sampling.
What prize would you offer? A year’s supply of veg for a family is virtuous, but a bit dull. How about a number of steamers? Or maybe a cookery course with a well-known chef?
The free draw has another benefit; it builds your database. By definition, participants are going to give you their name and address to enter the draw. You know they have an interest in healthy eating and that they like promotions. Put that together, and you have got a further business opportunity.
Save
This is the one that causes grown men to cry in their beer, because it means price cuts, and price cuts make you feel like you are working for nothing, don’t they?
Let’s be clear. If you match prices with major multiples, you will end up broke, or become a major multiple. Probably broke. But you cannot just ignore ‘save’ as a promotional tool, because it is hugely popular with customers. So you have to approach it from a different angle.
Product bundling is a serious option to consider and one where you can match or even beat bigger competition. The good old stew-pack can be copied into a variety of formats - for example, a lunchbox variety pack.
Presentation
If you are running a promotion, you should shout about it. Include it in any ads you run, on your website and in any mailing to your database. Above all, make a real feature of it in store.
Use large posters in the window and the body of the shop, such as A2 or bigger. The message should be clear - this is no time for subtlety. The words ‘free’, ‘win’ or ‘save’ should sing out. What the customer gets, and what they have to do to get it, should be instantly obvious. Show the promoted item and the offer with photographs. The clutter of terms and conditions can be left to “see in store for details”.
Include a snappy headline by all means, but do not let your marketing creativity confuse the basic message.
The small print
Promotions have some weird legal restrictions, especially in the area of free draws and competitions. The rule of thumb is to be specific and cover your backside.
For ‘free’ and ‘save’ offers, spell out the offer and any limitations and restrictions. Hence, name the promoted product(s) specifically, likewise the discount or free item on offer. And put an end date on the offer.
For a free draw, you must say “no purchase necessary”, but featuring this small is okay. Again, specify the prize and state that there is no cash option, say when the draw closes and when the prize winner will be selected. Apply limits to entrants, for example that they must be over 18 years old and that entrants are only allowed one entry per day.
For a competition, you may require a purchase to enter. As with a draw, you will have limits on time, who can enter and exactly what the prize is.
The competition must be based on skill and judgement, such as questions that the winner has to get right. Then you need a tie-breaker, for example ‘how many lemons are there in this picture’ (gazillions, obviously). The answer to the tie-breaker is not the actual number, but what it is in the opinion of a panel of expert judges. (I said it was weird). Weirder still, those experts can be you and two friends who like fruit. It is this complexity that makes me suggest you avoid competitions.
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