Sales promotion

In this sales promotion guide, we’ll focus on the three key activities you can use to drive short-term sales. Firstly, there are promotional materials which support in-store or online visibility. Then we’ll look at how price can be used to drive short-term sales. And finally, we’ll look at materials which support your sales team when they talk directly to consumers. Read our guide to raise your sales promotion game.

Sales promotion

How this guide raises your game.

  1. Read how sales promotion materials drive visibility and presence.
  2. Learn about different options to use price to drive sales promotion.
  3. The different types of promotional materials you can use to support your sales team.

Sales are the lifeblood of any organisation. It’s one of the most important roles of marketing to understand how to drive sales. Your marketing plan and brand activation need to include activities that focus on converting interested consumers to actual consumers.

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

But it’s obviously easier to say this than do this. This sales conversion is one of the toughest challenges in marketing.

Because your consumers are individuals. And, they will be at different stages of the brand choice funnel.

So, you will need a mix of activities across each stage of brand adoption. At different times, you need to make your target audience trust you. Be aware of you. Consider buying you. And then, actually try your product. 

It is this move from consideration to trial where sales promotion activities are hugely important.

Before we review each of what types of sales promotion activities you can do, let’s look at how sales promotion fits in to your marketing plan. 

Red Sale Sign

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Sales promotion as part of the marketing plan

So you might be thinking, if sales promotion drive sales, why not just do sales promotion all the time? Well, here’s the thing. 

Have you ever visited a car showroom and had to deal with a pushy salesman? One who seems to want you to buy right away?

Or do you get emails and phone calls from companies you don’t know? With special deals on insurance or savings on your utility bills? 

What about all those loud “BUY NOW” ads on your social media feeds? Full of offers for services that you have no intention of ever buying?

Annoying, aren’t they?

That’s because these promotions haven’t taken into account where you are in the brand choice funnel. Sales promotions only work when consumers are ready and willing to receive them. They have to be delivered at the right time and place. 

Choose your moments

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

It’s important to target your sales promotion at consumers who will be receptive to what you have to offer.

Think about when, where and how the audience will see your activity. 

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

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

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

The risk of too much sales promotion

Overuse of sales promotions makes you come across like the pushy salesperson or the unasked for call. It has the potential to impact your brand identity.

Do you want consumers to only associate you with deals and price offers? Will this mean they will only buy when you are on offer? And they can be easily switched if your competitor runs a sales promotion?

You run the risk of knocking down your profitability and relying on price switchers if you use sales promotion too much.  

You need to find a balance of short-term sales promotion activities to keep revenue coming in. But also long-term brand building activities which build up your brand identity over a period of time.

In this guide we will focus on reviewing the three types of sales promotion activities that can drive this short-term sales impact.

Firstly, activities which drive visibility at the point of purchase. Then, price driven activity where you communicate an offer to persuade a consumer to buy. And finally, activities where you have a sales team who talk directly to a consumer to close a sale and who need the right sales team materials to support them.

The last three feet

In the retail world, it’s often said that the most important place in a shopper’s journey is the “last three feet”.

It comes from famous quote about diplomacy from journalist Edward R. Murrow that states that the most important moment is when one person is in physical personal proximity to their goal. This three feet makes a large difference to the end result. 

It makes sense, right? The moment at which the consumer physically sees or picks up a product is a hugely influential one when it comes to sales. 

Supermarket

Now, obviously there will be products that have very loyal consumers who always buy the same brand. But this is the exception rather than the rule in most cases. 

In most cases, consumers will have a favourite but generally, choose from a range of acceptable products. And they may not make the final purchase decision, until they have those products 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 consumers might move sequentially through the stages of the funnel, repeat or existing consumers continually circle back to the consideration stage when they make a new purchase. And at this stage,  they will have a list of products that they are open to consider.

The consideration list

Now, if a product is an irregular purchase but has a high level of involvement, like a new car or a foreign holiday, in these cases, consumers will actively set up and review their consideration list. They’ll research benefits and and make informed and thought-out decisions. 

But, for products that are regularly purchased and low involvement, consumers don’t have time to do this. Why would they? So, they do have a consideration list based on past experience and exposure to other communications. But they make the decision from the consideration list only at or near the point of purchase.

For example, think about when you buy snacks.  Or laundry detergent. Or milk.

If you are like most people, you will have a ‘favourite’. But you’ll also have a few acceptable substitutes that you might choose if you’re favourite isn’t there. Or just to keep some variety.

This is your internal consideration list. You’ve probably never written it down. But it’s how your brain helps you make quick practical decisions about what to buy. 

And here’s where sales promotion and point of purchase materials make a difference. Because at the moment when a consumer has to choose from their consideration list, they work to increase the chances that they choose YOUR brand. They can bump your product UP the consideration list. 

Drive visibility and attention

The first way they do this is to create visibility and draw attention to your product. If your consumer doesn’t see your brand, you’ll never get a sale. 

Go into the average supermarket these days and you are faced with an enormous amount of choice. The average supermarket now carries between 40,000 and 50,000 items.

So, it’s a big challenge for your brand to be noticed. There’s a lot of competition for the shopper’s limited attention.

Anything you can do to make your brand or product stand out and grab attention will increase the chances of a sale.

Yellow pepper / capsicum on a pile of red pepper / capsicum to symbolise visibility and attention

Obviously, your packaging can play a big role to help you stand out. If you have a distinctive colour or shape, that can certainly help.

But, the shelves will be full of colourful packaging. And there’s a lot of evidence that consumers don’t scan every product on the shelf. In fact, there’s a lot of evidence that they only scan certain parts of the shelf. Products at eye level get more attention than products at floor level. 

Many businesses will 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 shelf layout is beyond the scope of this guide, we can look at ways to help boost your presence on shelf, irrespective of where your product has 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 sees the greatest number of people passing by. It gets the most traffic or footfall. And that means, it drives 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.

Consumers want to spend the least amount of time shopping as they can. So the convenience of nearby products works for them.

And that means, products in the middle of the aisle just get less people going past.

That means less sales.

Brand blocking example of infant formula products in a supermarket

What this means is that supermarkets and manufacturers love to position products in these high traffic areas. They use eye-catching and highly visible display units.

Manufacturers pay for these spaces and place their merchandising units in store. These units grab the shoppers attention and drive sales. Because they make it easier for the shopper. 

Check out the above example from the world of infant formula in an Indonesian supermarket. Check out the colour blocking, and the way these units grab the attention visibly. These type of sales promotion units grab attention and drive sales. 

Shelf strips and hangers

On the shelf itself, you can also look at signage and provide extra information about a product or extra services.

Check this example from Nestle Nan infant formula for example. They have put details of their Careline support team as an extra benefit for the shopper. There’s also a brand shelf sticker that sits with the product. 

In very simple terms, these types of activations have two aims.

Firstly, the bigger the visual ‘space’ the brand takes up, the more likely it is to be noticed

Nestle Nan infant formula

So, when you use these shelf strips or hangers, you can increase visibility and draw attention to your brand, You can make it more likely that the shopper will notice and pick up the brand.

But they also work on the level of being able to inform, educate or engage the consumer about the product too.

As we cover in our guide to packaging, changes to packaging have a long lead time. So, packaging does not change very often. But you can print sales promotion labels or leaflets to accompany a product in store in a much shorter time. And it’s usually much cheaper to do this than change your packaging. 

So companies will often place these materials at or near the shelf to boost the visibility of their products. Now, obviously, they have to work with the retailer on this. The retailer will control which materials can be used and when they can be used. And it’s all usually paid for by the manufacturer. 

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 consumer looks at the one store shelf on their digital device. Google call this the Zero Moment of Truth. 

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

Breakfast cereal Woolworths online

On seven of these products, there are extra or additional offers to make them stand out. Either ‘prices dropped’. “low price always’ or a specific dollar value discount. These fill the same role that the shelf strip or hanger does in store. They are additional visual cues to draw your attention to those products. 

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 on to your in-store sales promotion materials. Consumers with a smart phone only then need to point their phone at the code for it to activate the link. 

QR code example for three-brains

You could even consider Augmented Reality and 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 second area of sales promotion then after materials which drive visibility and engagement 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

These ‘money off’ offers are the most common pricing tactic. The consumer can buy the product at a discount to the regular price. Very simple, and very effective. 

It’s important to note that these discounts are time specific though. When the promotion ends, the product will go 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 six influence principles outlined by Robert Cialdini in his book about Influence and Persuasion. 

Sales promotion example - Percentage discount vouchers in store window

It plays in to a fear that people hate to feel they are missing out. If they do not take advantage of the offer, it will 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 this discount can be applied.

Sometimes, it can be a straightforward percentage discount on the price. Ten, twenty, fifty percent of a product for example.

To find 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 consumer to understand. In general, the bigger the discount, the more units you will sell. But obviously, the bigger the discount, the less profit you will make per sale.

So there’s a trade-off to be found to find the discount level that 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 to consider when it comes to sales promotion is to offer something extra for the same price. So, something of value that makes the regular price seem like a better offer. 

These types of giveaways such as on-pack promotions can drive extra purchase. The consumer feels they are 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. 

Giveaway sign

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

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 that can 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 are usually much simpler to implement from a supply chain point of view.

Salesforce driven 

The final area of sales promotion we will cover is for products which require more of a face-to-face conversation to complete a sale. These consumer is usually more involved in these types of products.They will have questions and need information before they can be persuaded to buy. 

If your brand or category falls into this description, then part of your brand activation will look at what salesforce materials you need to create. This could be for sales representatives who call on consumers directly. Or sales representatives who handle incoming visits and queries. 

Leaflets and brochures

The most common salesforce materials would be leaflets and brochures which provide information to potential consumers.

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

These types of items have three key aims. Firstly, they need to convey the key benefit that the brand offers the consumer, so that they can see why they should buy the product.

Reason why and reason to believe definitions RW = help consumers understand RTB = help consumers believe

Often leaflets and brochures help to bring out the Reason Why and the Reason to Believe for the consumer. So, that might be awards or scientific references or consumer reviews. Whatever key messages that give the consumer a clearer indication of what the benefit is. 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 that may be relatively low cost, but perceived high value.

Common examples would be clothing, stationery and practical items. These types of items work on two different levels.

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

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

Obviously, some care has to be taken over how this giveaway is offered. It cannot be too high value or it runs the risk of being perceived as a bribe. Clearly, this is unethical and illegal. It’s for this reason, that most such giveaways are low value so as not to be seen this way. 

For most businessess, you would look to work with a merchandising supplier like this one. 

These types of items usually need to sourced from specialist manufacturers and usually overseas. So it’s usually best to work with companies who specialise in this type of work. 

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 consumers.

This would usually then require the preparation of presentations and video content that the sales team will use in a call. 

This might be as simple as something in Powerpoint or Keynote. 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 consumer.

Some systems for example will track how long a sales representative spends on a part of the story. Or where a consumer asks for more information, and 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 consumer at the time when they are at the point of purchase. 

Sales promotion – Short and long-term activities

Sales are your most important objective in marketing. But as we stated at the start, consumers will not 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 as the ‘sweet spot’ based on aggregating data across multiple brands and categories. 

Obviously, not all brands, consumers 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 which will impact your return on sales. 

Three-brains and marketing communications

We have 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. 

If you want to know more about how we can support your marketing communications to grow your business  through our coaching and consulting services, click the button below to send us a message.

To achieve clear and consistent marketing communications, the first step is pulling together a clear brief for everyone involved in creating your activity.

That includes key elements of your target audience understanding and brand identity as well as stating your business and project goals. 

Download our blank template with accompanying notes to get your started on the process of creating a great marketing communications brief. 

Download it here or from our resources section. 

Powerpoint and Keynote versions of this document available on request. 

Marketing Communication brief - blank template
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