Sales promotion is intended to increase sales by giving customers an additional incentive to buy the product right now. This can be done with or without a price reduction. Sales promotion is being used more and more in retail: coupons, weekly promotions or displays are among the most popular measures.
What is sales promotion?
Sales promotion (also referred to as sales promotion or VkF) is the name given to limited campaigns with which customers are to be activated so that they buy more. Sales promotion measures are intended to influence customers shortly before they buy by giving them an incentive to buy now. Unlike advertising, which often gives a reason to buy (great product), sales promotion only gives an incentive to buy right now (now cheaper). Examples of sales promotion measures are: Coupons, special offers, special packs, loyalty discounts (so-called price promotions) as well as flyers, inserts, displays, product samples, competitions (so-called non-price promotions). (Wikipedia)
Retail sales promotion
Sales promotion measures in retail that are aimed at consumers are referred to as consumer promotions. These can be launched by a manufacturer such as Coca-Cola (consumer promotions), and also by a retailer such as ALDI (retailer promotions). The importance of sales promotion in retail is increasing - for example, retailers in Switzerland continuously increased their sales promotion budgets from 2009 to 2016 (Credit Suisse) - in the German car trade, sales promotion is now more dominant than traditional advertising (Autohaus).
Sales promotion goals
Overall, sales promotion measures aim to increase sales. This is to be achieved by the existing customers buying more or more often and by attracting new customers who try the product for the first time. Other possible goals of sales promotion are opening up new markets or securing a regular place in retail. (Mevaleo)
Types of sales promotion
In the case of consumer-oriented promotions in retail, different types of sales promotion can be distinguished. Price promotions can be offered to all consumers by offering discounts or special promotions. Alternatively, price promotions can also be offered only to certain consumers, for example through the use of coupons or Discount coupons. The latter has the advantage that only people who are price-sensitive benefit from the price reductions, which limits the loss in sales (gonnado). In contrast to this, non-price promotions do not set the incentive via the price, but via an increased perception for the consumer. For example, promoters can address consumers on site, give advice and submit samples. Or the attention of consumers can be drawn to certain products using flyers, displays or packaging.
Ideas for sales promotion
When looking for ideas for sales promotion, the first step is to clarify what options and budgets the retailer has. In particular, the use of promotional staff requires a lot of planning and causes high costs (action potential). It is easier to implement measures that do not require personnel, such as the installation of communication media in the branches or the distribution of communication media to the target groups. One of the simplest and most effective sales promotion ideas is coupons. These require neither staff nor means of communication in the branches and the loss of sales is limited by only benefiting people for whom the discount is really an incentive to buy. Learn more about Gonnado's couponing solution.
Sales promotion examples
Examples of sales promotion are:
- Promoters who present and recommend digital cameras of a certain brand in the electronics market, which means that consumers are more inclined to opt for these models.
- Promoters can also offer chocolates for tasting in the grocery store, for example, and thus spark the consumer's desire for something sweet.
- In a household store, the pans of a certain brand can be beautifully presented on an eye-catching rack so that they catch the consumer's eye.
- A florist can sell five roses for four so that consumers pay for four roses instead of three.
- A coupon can be stuck on the detergent, with which two bottles of fabric softener can be bought for the price of one.
- Visitors to the retailer's website can be advertised through retargeting ads, with a coupon being ordered on the target page by SMS or email so that prospective customers from the Internet can be measurably won over to customers in the store.
For specific sample campaigns, see Gonnado's case studies.
Sales promotion checklist
So that nothing is forgotten when carrying out sales promotion measures, it is worthwhile to create a sales promotion checklist at the beginning. The checklist could include the following items, for example:
- Has a situation analysis been carried out?
- Are the marketing goals being pursued?
- What are the sales promotion goals?
- Have the target groups been defined?
- Is there a sales promotion strategy?
- Is the budget set?
- Has an action plan been drawn up?
- Is the creative implementation planned?
- Has an organizational plan been drawn up?
- Is a test phase planned?
- How is it carried out in detail?
- Has the success control been defined?
By checking with a checklist, it can be ensured that everything has been thought of when carrying out sales promotion measures, from the situation analysis to implementation and success control.