Step by step process of how to build an effective Sales Promotion Strategy?

INTRODUCTION

You need to check the further points in order to build a rock-solid promotion strategy.

So, what you need exactly to build a promotion strategy to pay compound interest for your team? There are four steps that are:

1. Why: indicates to set the strategic objectives of your brands promotion program.
2. What: the sales promotion and incentive you’ll offer.
3. Who: to which customers you will offer each promotion?
4. How: how will you communicate and display the promotion to the customers you are planning to offer.

Let’s dive into each step-in detail:

#1 Set objective and key results:

It is quite obvious to set the objective of the promotion strategy because without setting objective your plan may go haywire. Do not confuse the setting of objectives with setting goals. Goals won’t help you to develop the strongest strategies for your promotions but objective will.

Examples of sales promotion objective:

The marketing team would try to mix two to three promotion techniques to achieve the desired objectives. Also, setting up too many objectives will also lead to more confusion and ultimately the plan will lead to a big failure.

Here are some of the examples to set for your sales promotion strategy:

• Improve customer experience with the help of creating personalized promotions.
• With the help of improved conversion funnel, boost the customer journey continuity.
• Reduce churn and improve customer retention.
• Increase the profitability.

If the above examples of setting objectives are achieved it will lead to the improvement across the board.

#2 Craft your price discounts and sales incentive mix:

This is one of the most popular sales promotion strategies every marketer is familiar with. Basically, there are two categories of promotions: evergreen sales incentives and limited-time offers.

Evergreen sales-incentives: Evergreen sales are discounts and offers that remain relevant over a sustained period of time. They are static and not tied to any marketing campaign, any season, or festivals. These kinds of promotions are bread and butter of your strategy. Some examples are:

• Free shipping
• Free samples
• Upsell and cross-sell discounts
• Welcome coupons
• Referral bonus
• Affiliate discounts
• Subscription bonus

Also note that if these promotions are evergreen it doesn’t mean that all your customers should have access to all these promotions continuously.

Limited time offers:

As the name suggests, limited time offers are promotions that are run for a fixed period of time. These are time bound promotions and relevant only for specific events, seasons, holiday, and other festivals.

Some few examples are:

• Product launch offer
• Inventory clear out
• Seasonal promotions
• Holiday sales

Both these plans needed to be included in your marketing strategy as these works together to achieve your marketing objective.

Without nailing these two techniques, you are not thinking strategically to create a sustainable growth of your brand.

#3 Determine who will get the promotion via data, personalization, or segmentation:

Well, it is not necessary to target all of your customers to buy something from you. Some will also buy it no incentives or offers at all. Applying every promotion technique will hurt the brand’s perception, profitability, customer lifetime value, and long-term health of your marketing strategies.

Thus, there are three factors to take into accounts:

• Data
• Personalization
• Segmentation

Warning:

Do not skip this step, as it is one of the cornerstones for nailing an effective sales promotion strategy. If you have mastered this step, you will definitely reap the benefits mentioned above:

Data:

Now imagine you just had a verbal communication with your friend about buying an air fryer, and suddenly after few hours later you will see ads all over the internet suggesting you to buy air fryers.

Wow, this feels a bit like Big brother is watching you, right?

But in reality, every action you take or watch on the internet is a data point. It can be pulled together and analysed with millions of other data points collected from people like you. It is used to predict your future purchasing behaviour with impressive accuracy.

So, when we are talking about data, we really mean that it needs to be an important element for your overall marketing strategy. Without data, it is impossible for a brand to segment your customers and the promotions they see.

Having more data is better, especially with behavioural marketing and segmentation.

So, it is better to bring other side data into the fold.

How this is possible? Well, it is all easy and possible due to AI and machine learning. So, relax and just focus on marketing promotions.

Segmentation:

Having a one-size-fit approach is not a winning strategy. You need to lean into customer segmentation to avoid falling into this promotion trap.

Customer segmentation is an essential part of any successful marketing strategy. It is not just for email marketing or paid social media.

You won’t be able to personalize the customer experience, unless you use the data to segment your customers. In the B2C word, there are three ways to segment the customers:

Demographic segmentation:

Dividing the audience into different groups based on locations, gender, and age groups.

Psychographic segmentation:

Grouping customers based on beliefs, goals, challenges, interests, and personality traits.

Behavioural segmentation:

Grouping customers based on the actions they take, such as what traffic source they came from, how they’ve engaged with your website, or whether they a new or returning visitors.

Personalization:

How pretty it would be to customize every product for each specific visitor? Conversions would skyrocket and your customers would love your brand exactly how you wanted them to be.

But it is not a pipe dream, as the customized onsite experience of a customer might sound out-of-reach.

Thus, if you and your friend landed on the same website at the exact same time might see different things:

Where you are a first-time visitor with low price sensitivity and high intent to purchase

Your friend is an existing, high-order valued customer who hasn’t purchased in a while and required an incentive.

It is best to personalize promotions based on product preference (psychographic), their purchase intent (behaviour), and not just location (demographic)

#4 Communicate your promotions to the right customers:

you need to get the offer in front of the right customers once you know which promotions you plan to offer and to whom.

You can use offsite and onsite marketing channels to acquire new customers. You need to do two things:

1. Drive awareness to majority of the target audience that hasn’t visited your store or website,
2. Re-engage the potential customers who left your store without getting converted

To sum up

Now you have the entire framework for your marketing team to set a strategy for sales promotion that will not only optimize conversions but will also:

• Preserve brand perception
• Protect profitability
• Reduce customer churn
• Increase customer retention
• Improve customer experience

Now you need to just identify the unique factors of your company, customers, and industries into the framework designed above and begin to execute your new and bulletproof sales promotion strategy.

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