Practical Advice for Creating Promotions with Your Brands

Brands continue to debate whether promotions effectively drive sales. Critics argue that promotions merely shift purchases into the sale period rather than generate incremental sales. They also warn that frequent promotions can train consumers to wait for major events such as Black Friday and Cyber Monday.

In my experience, promotions can be advantageous for brands depending on your objectives, the type of products you sell, and the nature of your promotion. For example, if your objective is to increase your average order value (AOV), promotions such as Buy Two, Get One Free (or something similar) can be an effective way to encourage repeat purchasing. In addition, sales on commodities, where there is little to no competitive differentiation, make more sense than those on highly differentiated products. If you’ve done a good job of establishing a USP (unique selling proposition), you shouldn’t need to run promotions. Your consumers will be willing to pay a bit more for the added value, assuming you’ve effectively communicated your differential advantages.

If your objectives and brand align with using promotions, then the manner in which you structure these promotions becomes critical. I recommend the following “AIM FAST” criteria for creating effective promotions.

• Awareness Builder – It doesn’t help to run a promotion if no one knows about it. Including the promotion in your advertising is essential.

• Immediate Gratification – Today’s consumers do not have the time or patience to wait for things like mail-in rebates that were once very popular among marketers. Consumers want their incentives right away.

• Measurable – Obviously, it’s important to be able to measure the effectiveness of your promotions so you can determine which to repeat and which not to. Plus, what works for one company may not work for yours, so testing is also important.

• Frequency Builder – Promotions that encourage repeat buying can help increase average order value. For example, Buy 2 Get One Free (or something similar.)

• Appeal to Target – Consumers will more likely convert when the incentive offered is something of perceived value to them. For example, a promotional study by Shopify found that sitewide discounts tend to be the most effective among many different promotional options.

• Simple – Promotions must be both simple for consumers to understand and simple for you to execute. Complicated offers, exceptions, and rules discourage participation. Use of promotion codes at checkout make it easy for consumers to receive their discount right away and achieve the immediate gratification mentioned earlier.

• Time-bound - I’ve found that the most effective promotions run for more than one day. “Flash sales” often do not provide enough time to generate sufficient awareness or for consumers to act. I recommend testing your promotions to determine what length of time works best for achieving your objectives. Also, be sure to communicate and remind your consumers of the end dates for your promotions to drive a sense of urgency.

My experience has shown that the more of these best practices you follow, the better the results from the promotion.

Join the Conversation

What's been your experience with running promotions - good tactic or a necessary evil? I'd love to hear about your promotional strategies and their effectiveness in the comments. (Scroll down to the very bottom of this blog post passed the "Recent Posts.")