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November 18, 2018

How to decide on a sales promotion

If you are a CEO, it can be hard to make objective decisions about marketing matters. Being asked to make judgements on an aspect of the business you may not have had to consider before.

For every big advertising concept you are asked to judge, there may be a dozen sales promotion ideas offered up for your scrutiny. Indeed, the short-term promotion seems to be the default offering for marketers on this continent. The reason usually given in the preamble to any presentation is ‘we needed something to produce results.’

That’s a strange notion from the outset. For it implies that everything else the team is doing is less than businesslike.

Advertising produces results. You just have to understand the appropriate measurement criteria. In advertising’s case, this may be how well perceptions of your brand improve against benchmark in consumer research. This is only measureable if you have a research budget and a commitment to understanding what consumers really think of you and your category.

Advertising could equally be tasked to create direct response. That requires the marketing team to set up a measurement mechanism, for example how many calls to the hotline, or how many response coupons were received.

Public relations produce results. Sometimes these are measured in terms of editorial centimetres or broadcast minutes generated on the correct storyline. With extra points being given to the company name being spelt correctly, or the managing director’s friendly face being centre stage. Neither of these is a mean feat, I can tell you. And, once again, the mid-to-long term effect of public relations can be measured in terms of research among your key publics.

So when your marketing team comes to you projecting results, first ask them what they have been doing in brand building terms.

Next, be very hard on the team’s claims for any promotional activity. Make sure that their measurement system is simple and has no equivocation. Promotions should be about concrete numbers. Trial promotions are probably the easiest to measure – as you can set clear targets for volumes of the new product you want to shift in the first month. But don’t forget repeat purchase – there’s no point having a trial if no one can tell you whether the consumer bought again.

Then ask them to restate the desired consumer audience for the brand, and explain to you how they believe the promotion will affect them. The reason I continue to stress this is that most promotional participants are transient consumers. The sort of people who drink stout, then switch to brandy for the period of the promotion in case they win a pick-up. Even mid-term, these people are of little real value to your brand.

Promotions are tactical weapons in the marketing war. But they must be used judiciously, against clearly defined targets.

We were in a meeting recently where the MD of a major food company challenged his marketing team to explain why they switched in and out of brand advertising and sales promotions. He stated quite bluntly that his impression of brand building was that it took time, consistency of investment, and consistency of message.

He was right. And his team could not justify the value trade-off of the promotions route. So he canceled it. Whether you do the same should depend on your confidence in the results predicted, and the relevance of a promotion to your long-term business aims.

Chris Harrison has 30 years experience of marketing and advertising. Most of them spent in Africa.

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