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Sales promotion

Why read this? : We explore 3 different ways to use sales promotion to drive short-term sales. Learn the ins and outs of visibility activities, using price mechanics, and supporting your sales team. Read this to learn how to get more out of doing sales promotion.

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Sales promotion

How this guide raises your game :-

  1. How to use sales promotion materials to drive visibility and grab attention.
  2. Learn the different ways to use price when running a sales promotion.
  3. Explore how promotional materials can support your sales team.

Sales are the lifeblood of any business. It’s critical your marketing plan and brand activation include activities which convert interested customers into paying customers.

You need a clear idea of how you’ll convince customers to buy your brand. And then buy again. And then tell all their friends how happy they are with their purchase. 

But it’s easier to say this than do this. This sales conversion is one of the toughest challenges in marketing. Your customers are individuals, who’ll be at different stages of their journey. So, you need a mix of activities to make your target audience trust you. Be aware of you. Consider buying you. And then, actually try your product. 

It’s between these last two steps, consideration and trial where sales promotion activities come into play. Before we get into specific activities though, let’s start with how sales promotion fits into your marketing plan. 

Sale sign in white on a red window with outline of a person walking past in the background

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Sales promotion in the marketing plan

You may think, if sales promotion drives sales, why not just do it all the time? Well, here’s the thing. Have you ever had to deal with a pushy car salesman? One who wants you to buy right away, and won’t take no for an answer. Do you get phone calls from companies you don’t know? With special insurance deals or savings on your utility bills. What about all those loud “BUY NOW” ads on social media? Full of offers for services you’ve no interest in?

Annoying, right?

That’s because none of these have taken into account where you are in the brand choice funnel. Sales promotions only work when customers are ready and willing to receive them. They have to be delivered at the right time and place, and in the right way. 

Choose your moments

When it comes to sales promotion in your marketing plan, you have to choose your moments.

It’s important to target your sales promotion at customers who’ll be receptive to your offer. You have to think about when, where and how customers will experience it. 

Think about what value there is for the customer in your sales promotion. You want them to see a benefit in your sales promotion.

In the brand choice funnel, this ‘ideal’ moment normally happens around the consider and trial stage. This is when customers are most receptive to a sales promotion.

The brand choice funnel - trust - aware - consider - trial - loyalty - repeat purchase

When consideration happens

Most customers have a list of products they consider. This might be a rough mental list or a formal written one. It might be one they’ve given much thought to, or it just kind of happens. It really depends on the category and type of purchase. 

Customers will actively set up and review lists for products they buy irregularly, but the decision is quite involved e.g. a new car or a foreign holiday. They’ll research benefits and and make informed, thought-out decisions. 

The opposite’s true for regularly purchased, low involvement products. Customers will have a list based on past experience and maybe if they’ve seen some advertising. But the decision is usually made at or near the point of purchase, with little thought. Think snacks. Milk. Laundry detergent. Most people will have a ‘favourite’. But they’ll also have a few acceptable substitutes if their favourite isn’t there. Or just for some variety. This type of list is rarely written down. But it’s how our brains helps us make quick practical decisions about what to buy. 

And here’s where sales promotion can make a difference. Because at the moment when customers choose from their consideration list and decide to try a brand, it can help bump your product to the top of the list. 

Where trial happens

Retail experts often say the most important place in a shopper’s journey is the “last three feet”.

It comes from a famous quote about diplomacy from journalist Edward R. Murrow. This suggested the most important moment is when one person is in physical personal proximity to their goal.

This last three feet makes a large difference to the end result. Makes sense, right?

The moment at which the customer physically sees or picks up a product is key to whether they buy or not.

Supermarket central aisle with lots of displays and signage on view

Obviously, some brands have loyal customers. They never change brands. But this is the exception rather than the rule. In most cases, customers will have a favourite but generally choose from a range of acceptable products. And they may not make the final choice, until those products are in front of them in the store. In the last three feet.

In McKinsey’s breakthrough study on the brand choice funnel, they showed that though new customers might move sequentially through the stages of the funnel, repeat or existing customers circle back to their consideration list when they make a new purchase.

The risk of too much sales promotion

One word of warning before we move on to how to do sales promotion. If you overdo it, you run the risk of coming across like the pushy salesperson. And you don’t want your brand identity to be annoying, right? It can also mean customers start to expect deals and price discounts. They’ll only buy when you’re on offer, and can be easily switched by a competitor sales promotion. You run the risk of reducing profitability, and relying on price switchers with too much sales promotion.

Ideally, you balance short-term sales promotion activities to keep revenue coming in with long-term brand building activities to strengthen your brand identity over time. There’s 3 main types of sales promotion activities which drive short-term sales impact :- 

  •  activities which drive visibility at the point of purchase.
  • pricing activity where you communicate an offer to persuade a customer to buy.
  • sales materials activities to support sales teams who talk directly to a customer to close a sale.

Drive visibility and attention

The first way type of sales promotion creates visibility and draw attention to your product. Customers need to notice your brand before they’ll buy it.

The average supermarket these days carries somewhere between 40,000 to 50,000 items. It’s a big challenge to get your brand noticed. There’s a lot of competition for the shopper’s attention. Anything that makes your brand stand out increases the chances of a sale.

Obviously, your packaging is one way you stand out. If you’ve a distinctive brand colour or shape, that helps.

Red tulip in a field of yellow tulips showing the impact of standing out and looking different

But, the shelves are full of colourful packaging. And there’s lots of evidence customers don’t scan every product on the shelf. In fact, generally they only scan certain parts of the shelf. For example, products at eye level get more attention than products at floor level. 

Many businesses work with shelf and merchandising experts on the optimum layout for a shelf. How many facings should each product have? Which shelf should each product go on? While this is beyond the scope of this guide, we can look at ways to help boost your presence on shelf, irrespective of where your product’s been placed. 

Product displays - end of aisle or freestanding 

Supermarkets and retail stores spend a lot of time observing where shoppers go. They look at which products sell best in which parts of the store.

What they observe is that the end of each aisle is a shopping hotspot. It gets the most people passing by, and it has a higher proportion of sales. 

Think about what people do when they shop.

Do they go down every aisle? Or do they check each aisle from the end to decide if they want or need anything?

Supermarket large display of multiple types of infant formula

Most customers want shopping to be quick. So the convenience of end of aisle products works for them. Products in the middle of the aisle get less people going past, and less sales.

Supermarkets plan carefully which products to put in high traffic areas. They also use eye-catching and highly visible display units to grab attention and drive sales. These make it easier to shop. Customers pick what they need off the display. Check out the above infant formula example. Check out the colour blocking, and the way these units grab attention. These type of sales promotion units help drive more sales. 

Shelf strips and hangers

On the shelf itself, you can also use signage to provide extra information about a product or extra services.

For example, see what Nestle Nan infant formula has done here. They’ve put details of their Careline team as an extra benefit for the shopper. There’s also a brand shelf sticker with the product. 

These types of activations deliver 2 benefits.

First, the bigger the visual ‘space’ the brand takes up, the more likely it’ll be noticed. 

Supermarket shelf showing three different cans of Nestle Nan Pro Gold infant formula

So, using shelf strips or hangers increases visibility and draws attention to your brand. You make it more likely the shopper will notice and pick up the brand.

They can also be used to inform, educate or engage the customer about the product, especially if something’s changed. As per our packaging development guide, packaging changes have a long lead time. So, packaging doesn’t change very often. But you can print sales promotion labels or leaflets to communicate changes to customers. This is faster and cheaper than changing your packaging. 

Many brands place these materials at or near the shelf to boost visibility. Obviously, they work with the retailer on this. The retailer controls which materials can be used and when they can be used. The manufacturer usually pays for this. 

The same consideration applies to online purchases

Though the ‘last three feet’ doesn’t work as an analogy for online shopping, the same principle applies. From a point in time when the customer looks at the shelf on their digital device. Google call this the Zero Moment of Truth. 

Look at this cereal shelf example from Woolworths online. In this case, Nestle have placed  the equivalent of shelf strip for their “Nestle Essentials Shop” in the second box.  

On 7 of these products, there are extra offers to make them stand out. Either ‘prices dropped’, ‘low price always’ or a specific price discount. These do the same job as the shelf strip in store. They’re additional visual cues to draw your attention to those products. 

Screengrab of Woolworths breakfast cereal page showing 12 different cereals to choose from

Link in-store and online together

As a final way to increase visibility and engagement at point of purchase, you can also look at how to link in-store and online together. For example, you can put your website address on a shelf strip.

But increasingly, more advanced technologies make it easier to create these links.

So, you could consider adding a QR code to your in-store sales promotion materials. Customers with a smart phone point their camera at the code to activate the link. 

QR code example for three-brains

You could even consider Augmented Reality. There’s a great set of examples in this article from e-Consultancy which shows how brands like Ikea and Dulux are using this technology at the point of purchase to increase their visibility and engagement levels.

Pricing

The next area of sales promotion is where you run price promotions. This is either when you remove an element of price, or add something of value for the same price. 

Temporary discount offers

‘Money off’ offers are the most common pricing tactic. The customer can buy the product at a discount to the regular price. Very simple. Very effective. 

It’s important to note these discounts are time specific though. When the promotion ends, the product goes back to the regular price. 

These types of discount offers tap into the concept of scarcity to influence shoppers and nudge them towards a sale. Scarcity is one of 6 influence principles outlined by Robert Cialdini in his book about Influence. (see also our article on how to use behavioural science in marketing).

Shop window with two clothed mannequins and three price discount stickers on the window of 50%, 30% and 20%

It plays to a fear that people hate to feel they’re missing out. If they don’t take advantage of the offer, it’ll be back at the regular price the next time they shop. So, they feel compelled to take advantage of the perceived opportunity.

Discount options

There are a number of ways to apply this discount.

Sometimes, it can be a straightforward percentage discount on the price. 10%, 20%, 50% off, for example.

Finding the “best’ discount offer for your brand or category is usually a process of trial and error. You should try to run different offers at different times. And then model the difference in the sales during the promotional period versus the non-promotional period. This way, you can work out the relative return on the cost of the promotion.

The straight discount model on sales promotion is very common as it’s simple for the shopper to understand. In general, the bigger the discount, the more units you sell. But obviously, the bigger the discount, the less profit you make per sale.

So there’s a trade-off to find the discount level which makes the most sales and profit overall. 

There are obviously some variations to this approach where you might offer products like two for the price of one. Or buy one get one free. These types of offers work well when you want or need to drive through more volume. For example, if you plan to discontinue a product and need to clear stock.

These types of offers work well to lock customers in to your brand for longer. Compared to a straight forward price discount which works more to switch sales from competitors.  

Value add offers

The other option when it comes to sales promotion is to offer something extra for the same price. So, something of value which makes the regular price seem a better offer. 

These types of giveaways such as on-pack promotions can drive extra purchase. The customer feels they’re getting something for nothing.

This can be an item at the point of purchase such as a free gift. Or an offer that can be acted on after the purchase. 

It’s very common sales promotion in higher value per purchase categories. For example alcohol, where brands will often offer free glasses or corkscrews as a gift.

Coloured sign on the roof of a building saying Giveaway

The challenge with these sort of sales promotions is usually a logistical and supply chain one. The addition of the extra free item needs to be factored in to the sales cost, and how the product makes it to the store and on to the shelf.

In other categories, this offer can be more ‘virtual’ such as a voucher or code to be redeemed online. This could be for an item to be sent out separately. Or as a discount on a purchase of another item.

These types of offers also have financial implications you need to work through. But they’re usually simpler to do from a supply chain point of view.

Salesforce driven

The final area of sales promotion is for products needing a face-to-face conversation to complete the sale. The customer is usually more involved in these types of products. They’ll have questions and need information before they can be persuaded to buy. 

If your brand falls into this description, then part of your brand activation will look at creating salesforce materials. This could be for sales representatives who call on customers directly. Or sales representatives who handle incoming queries. 

Leaflets and brochures

The most common salesforce materials are leaflets and brochures which provide information customers.

These present your brand identity in a compelling and persuasive way. They can be used by the sales force directly in a call or contact. Or as a ‘leave behind’ item the customer reads later. 

These types of items must convey the key benefit the brand offers the customer, so they can see why to buy the product.

Often leaflets and brochures help bring out the Reason Why and the Reason to Believe for the customer.

For example, awards, scientific references or consumer reviews. Whatever key messages give the customer a clearer idea of the benefit. And why they should believe it.

Giveaway items

A second common area of sales promotion materials are giveaway items. These are often branded merchandise items which may be relatively low cost, but perceived high value. Common examples would be clothing or stationery items. 

These products appeal to a sense of reciprocity, also from Cialdini‘s list of influencer behaviours. Customers might look more favourably on the sales person because they’ve received something for free.

It’s unlikely a low cost item like a pen or a key ring will be enough to persuade a customer to buy on it’s own. But they build goodwill over time between the sales person and the customer. And they’re a visible reminder of the brand. 

Obviously, some care has to be taken over how you offer this giveaway. It can’t be too high value or it runs the risk of being seen as a bribe. Clearly, this is unethical and illegal. It’s partly for this reason, that most giveaways are low value.

Most businesses would work with a merchandising supplier like this one. They have expertise in sourcing items from specialist manufacturers, often overseas. 

Presentations

Finally, for some categories, you may need to set up the ‘sales story’ with your sales team. This is particularly true if they call on customers. This means preparing presentations and video content for the sales team to use in the call. 

This might be as simple as something in Powerpoint. But increasingly, companies will use integrated technology platforms like Salesforce or Veeva to link the messages they present with other information the company has about the customer.

For example, some systems track how long a sales representative spends on a part of the story. Or where a customer asks for more information, so they can serve personalised content based on this interaction. 

These types of systems are sophisticated sales promotion techniques since they integrate not just the message, but knowledge of the individual customer at the time when they are at the point of purchase. 

Conclusion - Sales promotion

Sales are your most important objective in marketing. But as we stated at the start, customers won’t always be receptive to your sales message. 

So, you need to work to find the right balance of short-term sales promotion and long-term brand building communications. The book The Long and the Short of It by Les Binet and Peter Field looks at a number of campaigns in terms of their effectiveness. It lands on a recommendation of a roughly 60 per cent focus on long-term brand building to 40 per cent focus on short-term sales promotion. This is the ‘sweet spot’ based on aggregating data across multiple brands and categories. 

Obviously, not all brands, customers and categories will fit exactly to this model. But it’s a good starting point when you start to build your marketing plan. You can test doing more or less of one area to see the impact on sales. 

Three-Brains and marketing communications

We’ve worked on many marketing communications projects including sales promotion. We know how to connect sales promotion back into driving your brand marketing and growing your sales. 

Email us to find out how we can support your marketing communications to grow your business through our coaching and consulting services.

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