Help with Your Promotions
Help with Promotions:
Definition of a Promotion: To give a heightened awareness to a product/s
Planning a Promotion for Profit
A successful promotion must make you additional profit, either in money terms or in terms of creating loyalty and the return visit.
Types of Promotions
Price promotion – Where the price is obviously slashed. Gives good sales at the time, but when the price returns to normal the customers stops buying for a while. Best practice, cut the price, sell fast and remove the line.
Disguised price promotion – Where you give more for the same price, buy a can of lager for instance with 33% extra free. When the 33% is removed the customer still buys at the same rate as they did before.
Timed – Where there is a start and finish time to the promotion, happy hour is an example.
Launch – Where the product is unheard of. Simply conducting an awareness campaign through word of mouth, merchandising, advertising
Loyalty – Where your sole objective is to get long term repeat custom, by rewarding customer loyalty. Sometimes a club is formed.
Collectors Items – Where is set of something is available, usually one of the set is harder to get than the rest, prompting repeat purchasing to achieve the complete set.
Coupons – Where a coupon can be redeemed or spent solely at your business.
Based on your normal profit level being achieved within the promotion, on all stock sold, you must aim at a minimum of ‘three times’ the total outlay of the promotion being in the till, excluding VAT (in addition to your normal takings) at the end of the promotion, to be able to say the promotion was a success. Make sure you count the costs of the promotion thoroughly; you must include everything, additional wages, giveaway food, and anything else you have laid on for the promotion.
Measuring Success in Monetary Terms
Look at your takings history for that day, and deduct it from what you have taken during the promotion. Divide the difference by three; the figure you are left with MUST be more than the cost of your promotion. If it is, you have a success!
Evaluating Your Promotion
Evaluation is the key part of planning promotions. It enables you to understand what makes a ‘good promotion’. Learning from mistakes is an essential part of the process of evaluation.
Customers will have comments regarding your promotions, it is essential to listen and take from the comments all the statements that may help you improve the next one.
Director for and on behalf of BHMA Limited.