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Three Steps to Effective Sales Promotions

Get customers out of a holding pattern with a top-notch campaign.
February 1, 2010
URL: http://www.entrepreneur.com/article/204860

Getting customers to plunk down cash or credit cards remains a painfully slow process in this struggling economy. And that's precisely why it's important--and always will be--to lure potential buyers with promotions. In fact, coming up with attractive promotions has become a bigger deal than ever.

When done correctly, promotions get customers out of a holding pattern by giving them an incentive to take action before a limited-time offer expires.

Here's what you need to do:

1. Target your effort
Promotions can spur purchases by established customers, reel in new customers, draw customers from competitors, get current customers to buy differently, and stimulate business during slow periods. But rarely can one promotion accomplish all of those objectives at once. As a result, you must decide which of the following is most important so that you can target your effort:

After carefully and thoughtfully defining the audience and the change you want your promotion to inspire, ask yourself this question: If you offer a time-limited incentive, is it likely that the customers you've targeted will respond? If so, continue to the next step.

2. Plan your incentive
A well-thought-out, properly targeted promotion prompts customers to take action by offering one of these incentives:

As you decide on your incentive, keep these facts in mind:

Price offers must be strong enough to compel, but reasonable enough to keep your business out of red ink. Avoid uninspiring 10 to 20 percent discounts, but also avoid very deep discounts unless they promote a loss leader to generate other higher-margin sales, or unless they'll attract valuable new customers into your business.

Coupons always make a comeback in penny-pincher markets, which means they're hugely popular these days. Even young consumers and affluent shoppers--groups that traditionally shun coupons--are using them, boosting the typical 1 to 2 percent redemption rate by nearly 20 percent. Printed coupons are still the most widely circulated, but printable coupons, distributed on web sites and via e-mail, provide a terrific way to test price offers with business friends and fans before incurring costs to promote the offer more widely via other media.

Samples work in all lines of business to let customers try before buying. The key is to sample products that are so great they'll win raves and repeat business.

Events and experiences draw customers for celebrations, product launches, special appearances or presentations, and other activities that combine entertainment with brand and product presentations. When hosting an event, make sure to go all out. A half-hearted, poorly attended event is worse than no event at all, so plan, decorate, train your staff and publicize accordingly.

3. Know what you want to achieve
Promotions work especially well when consumers are in need of a jolt to take buying action. Just be clear about what you want to achieve. Set the number of sales you want to ring up, dollars you want to bring in, customer names you want to collect, buying patterns you want to change, or any other objective you want your promotion to achieve. Then determine what your desired change will mean financially to your business.

By knowing the potential bottom-line impact of your promotion, you'll have the information you need to allocate a promotion budget, dedicate staff time and invest the energy necessary to host a strong promotion that will deliver business-boosting results over the time period it covers.