It's easy to get carried away when planning a promotion but, remember it's about giving your customers a taste of something and not giving away too much!
I decided to write this article after a colleague of mine had overheard a small business owner talking about a promotional offer they were running. It was for a full-size large body lotion on a 'by one get one free' (BOGOF) giveaway. If I had been there, I would have felt compelled to walk up to them and explain why they should not be giving so much away for free. This type of offer is great for customers, but bad for business, as there's little chance anyone would be back any time soon if they're well stocked-up... Yes, the customers may love your product and then feel encouraged to purchase other products from you, but they can still be made to feel like that by offering something smaller.
When you are considering whether or not a promotional offer is the right choice for your business, you need to start by breaking down the 'PRO':
- P – PURPOSE
- What are you trying to do/achieve?
It is important to know why you want to run a promotion, defining the main objective(s), to help you form a campaign strategy around the promotion.
- This should accompany market/competitor research and the analysis of as much customer data as possible (both digitally and offline). You need to make sure that what you want to do actually makes business sense and is justifiable.
- If you don't have a lot of data, don't worry, just look for inspiration from others who have done something similar and use the offer as a test and learn!
- When offering anything on a promotional deal, the idea is to encourage potential customers to experience your brand and products/services, so that you leave them wanting more, then you can move them further through the customer lifecycle journey and they'll become increasingly valuable to you.
- What are you trying to do/achieve?
- R – ROI (Return on investment)
- You must give your promotion a measure so that you can analyse the success of the promotion.
- Set aside a timeframe in which you will be recording the data and have realistic goals that you wish to achieve – basically setting out your KPIs (Key Performance Indicators).
- Not all offers will have a positive return immediately (financial or otherwise), it might be that once a customer 'buys' into your business/brand that they won't come back to you for a while. I.e You have to consider your product usage times, or realise that someone might not need to use/re-use your services straight away and sometimes ROI can just be about brand awareness. However, if you're lucky enough to have a wealth of customer (GDPR compliant) data... you can target them with alternative promotions in the future - but don't SPAM them!
- Calculating your ROI% works like this:
(Gain from the investment - Cost from investment)
÷ Cost of investment
- O – OFFERING
- Put together the details of your offer will actually be.
- Make sure you put a cap on your offer and include Terms and Conditions!
- In other words, make sure you have your terms and conditions visible wherever the offer is being shown, include an offer end date and any other important details such as eligibility and criteria. (I.e. One per customer transaction, only 10 available, and so on.)
- You need to make sure you have set quantity of what you are offering or a maximum amount you are willing to invest (£) and don't go over it.
- Remember... you don’t have to offer a promotion with everything or for everyone! Be specific and don't be afraid to ask for something in return... 'when you buy ___, get ___' or, 'when you spend ___ get ___'. Like they say, there’s no such thing as a free lunch!
- Monitor the offer regularly throughout the length of the promotion and analyse the results at the end.
- Here are some examples of the types of promotions you could consider:
- Sampling (don't forget to factor in your 'cost of goods')
- Giveaways (competitions, prizes, branded merchandise, etc)
- Discounting (money off or percentage reductions)
- Free delivery and/or returns
- By one get one free (BOGOF)
- Loyalty reward schemes
- Price matching
Promotions really are useful for any type of business! Whether your business offers services or sells products and these three things will help you to set out the basic structure for your promotion & provide a guideline for your campaign strategy. A promotional offer may not always be about profit, but it always needs to be affordable for you to run.
For details on advertising standards and regulations visit: https://www.asa.org.uk/
If you're a start-up or small business, looking for help and advice to set-up and grow, get in touch with Wenta today.Let's do this!