Sales promotions are defined as techniques used to attract more customers to buy the products and service quickly within a time durations and hence the impact of sales promotion on sales of the company is very large.
Impact Of Sales Promotions
1. Increase Sales Revenue or Topline
Sales promotions are an expense for a company and hence every company focuses on increasing revenue or the topline of the company but truth is that sales promotions impact the profitability of the company but increases sales volume, therefore, sales promotions are performed to increase the cash flow of the company on time to time basis.
Sales promotion activities are conducted mostly during festivals or any occasions like examples: Merry Christmas, New Year, Eid -ul-Fitr, and Diwali or Grand Opening.
While sales promotion activities are not conducted mostly in quarter4 ( Q4) as companies cut down promotional costs to increase profitability and revenue.
Examples: Amazon and Flipkart together achieved sales revenue of $3.4 billion in just 4 festive days.
2. Increase Customer Base
Sales promotion is a strategy to increase the customer base and hence companies provide attractive discounts, offers, trial offers, and royalty points to gain customers. While increasing the customer base companies lower their prices and compromise with profitability for a short period of time because they understand that once customers attached we would cross-sell new products and services and maximize profit later .
Example: Reliance Jio offered free internet service to customers and increased the customer base to 300 million in 2021.
Building a brand is also a sales promotion strategy but using different sales promotion methods to build a brand is a short-term strategy because brand building can’t be done in 3-6 months at least it takes 5-7 yrs or more to build a brand.
A lot of business takes sales promotion as brand building method but it’s not true in this competitive world, one has to consistently deliver and innovate its products and services to build a brand.
A brand is supported by sales promotion to increase sales and revenue.
Examples: Trade Fair is a sales promotion method to build a brand.
4. Partnership Opportunities
Partnership opportunities will open up when sales promotions are done. With the sales promote your products and services can reach too a mass audience and hence many enterprises would love to tie up or become a partner or distributor which will ultimately lead to an increase in sales volume and revenue .
” If you think you can grow alone then you definitely fail” and hence today collaboration and partnership with different business will help and support to grow .
Examples: Oyo Rooms has partnered with more than 43,000 hotels with over 1 million rooms around the world.
5. Add Investors
A lot of time sales promotions are done to add new investors into the company because new investors bring money with them and hence it helps companies to grow and scale fast .
When a promotion is done it catches the eye of investors and therefore investors think to invest in the company against equity and dividends which also helps in brand building.
Benefits of Sales Promotions
The benefits of sales promotions are as follows:
|BENEFITS OF SALES PROMOTIONS|
|Increase Sales Revenue|
|Increase Customer Base|
|Introduce New Products & Services|
|Gain Customers Insights|
|Reach Mass Customer Quickly|
|Build Brand Image|
|Stay Ahead Of Competitions|
|Active Your Deactive Customers|
|Add New Investors|
14 Sales Promotion Techniques
There are various examples and techniques of sales promotion :
|SALES PROMOTION TECHNIQUE|
|Google Adwords | Youtube|
|Buy One Get One Free|
|Get Free Ride|
|Refer & Earn|
|Vouchers & Coupons|
|Purchase for donation|
1. Social Media
Social media is required for all business categories today due to the huge customer base on social media platforms.
2. Google Adwords | SEO | Youtube
Sales promotions is incomplete without products of Google and search.
Discounts are the most popular sales promotions technique of all time and are applicable for all businesses category.
4. Free Trails
Free trails techniques are most popular among SAAS and software products .
5 . Buy One Get One Free
This sales promotion is most popular in food, clothing, and FMCG businesses.
6. Get Free Ride
Now such promotions are very popular in cab and taxi service business.
7. Refer & Earn
Every business is looking for new customers and hence refer & earn is now very popular in every business category.
Cash backs are most popular in electronics, eCommerce, telecom, and payment gateways businesses.
9. Vouchers & Coupons
Such promotion techniques are popular in the food, electronics, tourism, clothing,eCommerce, and entertainment business.
10. Free Shipping
Most popular in online shopping business.
11. Purchase for donation
In a pandemic situation, such promotion is very effective for all businesses; purchase product/service and a part will be donated towards cause and charity.
12. Sales Canopy
Telecom ,2 & 4 wheeler and electronics business mostly used sales canopy techniques.
13. Roadshow Vehicle
Telecom,2 & 4 wheeler, hypermarkets, clothing and electronics business mostly used roadshow vehicle techniques.
14. Trade Fairs
Trade fairs, exhibitions, or expos are mostly popular for automobiles, industrial products, tourism, real estate, and furniture business.
We use different sales promotion techniques to increase revenue and customer’s but impact of sales promotion will have both positive and negative effects depending upon the business and location we are operating in. Hence ,choosing strategy/techniques for sales promotion very smartly by analyzing the situation.
Frequently Asked Questions (FAQ)
With rich experience in sales & marketing, Neeraj Upadhyay specializes in sales, business development, service, revenue achievements, training, team building, price, strategy business expansion, new product, and many more. He is an expert sales and marketing professional and hence his written article are most among our reader’s favorite.