HER LIFE Magazine

herlife | working womenAddingIncentivestoDriveSalesby catie watsonAdvertising is a great tool for creating a brand identity and influencinglong-term customer loyalty, but successful business ownersknow that promotions are the best way to drive short-termsales. Promotions are giveaways or special events that give customers anincentive to make an immediate purchase of goods or services. Some ofthe most common examples of promotions include coupons, price deals,free samples, contests and rebates. Most of these promotional techniqueshave been around for decades, but some are being offered with moderntwists that are especially effective in today's economy.Discount coupons are one of the most widely used forms of promotions.Traditionally distributed by direct mail or through print publications,coupons are so common that only a small percentage of them areever redeemed. A new form of coupon, offered by "deal-of-the-day" websiteslike Groupon and LivingSocial, uses social media to target customerswho are most likely to make a purchase. People who register as membersof these websites receive daily emails with offers for discount coupons.For example, an offer may be for a coupon for $100 worth of spa servicesfor $50. Deal-of-the-day offers are available in limited quantities and fora limited time (usually only a day or two), creating a sense of urgency forcustomers who are considering purchase. A predetermined number ofpeople must sign up for an offer before it "tips" and becomes available.This number and the total number of offers available are set by the businesswhich posts the offer. Once an offer becomes available, customersprepay for the coupon and must use it within a designated period.Deal-of-the-day websites usually keep up to half the money thatcustomers pay for an offer, with the rest going to the business. Unlikeother types of advertising, merchants don't have to pay anything upfrontin order to post a deal-of-the-day offer. Another advantage for businessowners is that these websites gather personal information and trackcustomer preferences so that offers are sent only to those customers whoare most likely to be interested. Offers are also targeted according togeographic area. The almost overnight success of Groupon testifies tothe effectiveness of deal-of-the-day offers as sales incentives. One of theonly drawbacks for businesses is the risk of being swamped with customerscashing in coupons. Small businesses in particular should be carefulabout overcommitting when posting deals.Buy One Get One (BOGO) is an example of a price deal promotionthat's becoming increasingly popular. Customers who buy one item geta second item at a deep discount, such as "BOGO 75 percent off." BuyOne Get One Free (BOGOF) is another form of this type of promotion.The terms BOGO and BOGOF make this promotion seem modern andfresh, but the concept isn't new. BOGO promotions are essentially thesame as offering a sale price on a single item, but have the advantage ofhelping to reduce inventory. They are especially useful for businesses thatcarry seasonal stock, such as clothing and shoe stores. Before offering aBOGO incentive, a business should make sure it will still make a reasonableprofit after taking into account the projected increase in sales.Another popular sales promotion is the use of in-store events thatbring potential customers through the door of a business. Free samplesand appearances by local celebrities are an age-old form of promotion,but many businesses today are taking in-store events to the next level byproviding a special experience for the customer. Guest speakers, demonstrationsand free or low-cost classes that provide useful information (notjust a sales pitch) give customers a good feeling about a business. In-store36 HERLIFEnewyork.com