What is the impact of sales promotion on sales of the company with examples?

Sales Management

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.

Sales promotions can be paid or free in nature depending upon the current marketing objective of the company as the promotion remains the 4th pillar of marketing after product, price, and place.

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.

purpose of image is to show amazon and flipkart both sales revenue together

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.

purpose of image is to show how reliance jio has created its customer base.

3.Build Brand

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.

purpose of image is show how trade image helps in building brands

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.

purpose of image is to show how oyo rooms has partnered with hotels

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.

purpose of image is to show how investors get added after sales promotion

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
Social Media
Google Adwords | Youtube
Discounts
Free Trails
Buy One Get One Free
Get Free Ride
Refer & Earn
Cashbacks
Vouchers & Coupons
Free Shipping
Purchase for donation
Sales Canopy
Roadshow Vehicle
Trade Fairs

1. Social Media

Social media is required for all business categories today due to the huge customer base on social media platforms.

purpose of image is show how social media is important in sales promotion

2. Google Adwords | SEO | Youtube

Sales promotions is incomplete without products of Google and search.

purpose of image is show how google search & ads is important in sales promotion

3. Discounts

Discounts are the most popular sales promotions technique of all time and are applicable for all businesses category.

purpose of image is show how discounts is important in sales promotion

4. Free Trails

Free trails techniques are most popular among SAAS and software products .

purpose of image is show how free trails is important in sales promotion

5 . Buy One Get One Free

This sales promotion is most popular in food, clothing, and FMCG businesses.

purpose of image is show how buy one get one free is important in sales promotion

6. Get Free Ride

Now such promotions are very popular in cab and taxi service business.

purpose of image is show how free ride is important in sales promotion

7. Refer & Earn

Every business is looking for new customers and hence refer & earn is now very popular in every business category.

purpose of image is show how refer & earn is important in sales promotion

8. Cashbacks

Cash backs are most popular in electronics, eCommerce, telecom, and payment gateways businesses.

purpose of image is show how cashbacks is important in sales promotion

9. Vouchers & Coupons

Such promotion techniques are popular in the food, electronics, tourism, clothing,eCommerce, and entertainment business.

purpose of image is show how vouchers & coupons is important in sales promotion

10. Free Shipping

Most popular in online shopping business.

purpose of image is show how free shipping is important in sales promotion

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.

purpose of image is show how purchase for donations is important in sales promotion

12. Sales Canopy

Telecom ,2 & 4 wheeler and electronics business mostly used sales canopy techniques.

purpose of image is show how sales canopy is important in sales promotion

13. Roadshow Vehicle

Telecom,2 & 4 wheeler, hypermarkets, clothing and electronics business mostly used roadshow vehicle techniques.

purpose of image is show how roadshow vehicles is important in sales promotion

14. Trade Fairs

Trade fairs, exhibitions, or expos are mostly popular for automobiles, industrial products, tourism, real estate, and furniture business.

purpose of image is show how trade fairs is important in sales promotion

Conclusions

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)

The five basic reasons for conducting sales promotion are : 1. Increase Revenue 2. New Customer Acquisition 3. Build Brand 4. Partnership Opportunity 5. Add New Investors
Yes ,sales promotion is effective but keeping in mind three things before going for it . 1. Locations/Platforms 2. External Environment 3. Fund
The top 3 disadvantage of sales promotion are : 1. Burn Cash 2. Reduce Profitability Margin 3. Attract Competitors Attention
An effective and good sales promotion is one that gets noticed in the eye of customers if your customer does not notice your ads or promotions then it's a failure.
Yes , local newspaper promotions /ads is effective to some business categories like: 1. Real estate 2. Electronics & Appliances 3. 2 & 4 Wheeler Business
No, sales promotion is not mandatory for doing generating sales or doing business.

Neeraj Upadhyay

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.

http://www.salesgenerator247.com

Leave a Reply

Your email address will not be published. Required fields are marked *