Build Market Awareness with Promotions
Promotions can be anything from sales, sales events, promotional items like gift bags. In short, a promotion is any event or action designed to increase awareness of your products and services; and as a by-product, promotions should increase customer loyalty. So, let's start our discussion of promotions by discussing customer loyalty.
In business terms, "loyalty" means a customer will buy… and then come back and buy again.
There are three basic types of customer loyalty:
- Purchased loyalty. A great example of purchased loyalty is a rewards program. You can also purchase loyalty through memberships, coupons, or rebates. Purchased loyalty occurs when customers are "paid" to be loyal. In many industries and market segments purchased loyalty is a great strategy. The problem with purchased loyalty is that customers can be "bought" from you by competitors. If a competitor offers a better deal your customers will start doing business elsewhere.
- Convenience loyalty. Some customers are loyal to you simply out of convenience. Convenience loyalty is great unless a competitor offers greater convenience, of course.
- Service and brand loyalty. Real, long-term loyalty occurs when customers are satisfied and can see no reason to buy from another company. Some customers are so satisfied with your services they cannot imagine shopping somewhere else, for example. True loyalty is the "holy grail" of business and is what every business hopes to achieve.
Promotions help you engage customers and over time turn them into long-term, loyal fans of your business. You can use promotions to purchase loyalty or to create convenience loyalty. For example, you may offer a two-for-one special on certain products; if the offer is tempting enough you may generate a number of new customers. Once the promotion is over those customers may jump ship unless you work hard to satisfy them, meet their needs, and win their business. Or say you run a dry cleaning business and you establish a pick-up and delivery service; by creating convenience loyalty you may win new customers. Satisfy their needs and they may not be able to imagine doing business anywhere else.
Here are some of the more common types of promotions you can run:
- Sales and discounts
- Discounts on orders or sales over a certain amount
- Buy one, get one at reduced price
- Free gifts with purchases
- Free or reduced cost shipping
- Memberships (with reduced prices on purchases)
- Loyalty programs that provide discounts, additional services, and other perks
Don't forget about point-of-sale promotions. Once a customer is in your store or on your website, work hard to help them understand the value of making additional purchases. Since marketing to new customers is typically six to seven times more expensive than marketing to existing customers, make sure you work hard to satisfy and market to customers once they are in your store or on your website.
Unlike direct advertising, promotional items are intended to enhance and extend awareness of your business or services. (For example, giving customers shirts with your company logo is a form of advertising, but certainly not a direct form of advertising.)
The goal of promotional products is to increase your company presence. Most companies use items like shirts, caps, coffee mugs, note pads, umbrellas, any item that is useful, not likely to be thrown away, and can clearly display your logo or other branding. If you choose the right items, your customers could gladly become walking billboards for your company, as long as they feel good about wearing or using the item.
Just take a moment and think about the type of business you run. Shirts, caps and umbrellas are appropriate for almost any business. On the other hand, an ice scraper could be a nice tie-in for a company that sells automotive products but a little less relevant for a lawyer. A lawyer may wish to give away branded note pads, portfolios, or even pens. Make sure the items you choose reflect well on your business and create some amount of tie-in to your core products or services.
And while you're at it, determine how and under what conditions you will give away promotional items. Make sure the rules are clear and consistently followed. A customer who asks for a shirt and is denied may walk away with hard feelings unless the he or she understands why they did not "qualify" for that item. If you are in doubt, provide the item. Don't risk hard feelings over a shirt or cap. Every customer interaction can be positive or negative with long-lasting effects. Make sure every customer experience is an outstanding one, no matter what promotional efforts you engage in.