5 winning promotions that increase sales AND profit

Are you looking for five winning promotion types that drive both sales and profit? Then look no further…..You've come to the right place. Now, my name is Paul. If you've not met me before, I'm an accountant, a CFO, an entrepreneur, and I've spent over 25 years helping businesses to grow profitably, including three businesses of my own. Before we go any further, if you haven't done so already, I'd like you please to click on the subscribe button below so I'll be able to send you updates on all the exciting content I’m posting on a weekly basis, which will help you to grow your business.

Let's get right into it then. I promised you five strategies, but before we get into that, you might want to watch the training session I did the other week on the theory behind successful promotions, which applies to both products and services, by the way. So if you've not checked that video out yet, I'll put the link on on the screen. 

Before we get into the training, I want you to ask yourself one question and put your answer in the comments below. That is, are you clear on the objective behind your promotion?  I’ll bet you’re thinking “Isn’t the objective to make money?” Well, yeah, but it's a bit more nuanced on that. You might be running a promotion to drive sales and profit. Or maybe you just want to generate cash in the bank because you want to sell off old stock (inventory). Maybe you want to win new customers. It may be you're trying to encourage repeat customers. Maybe trying to kind of boost the value of each transaction….

Once you’re clear on your objective, that will help inform what kind of promotion is going to work best for you in those circumstances. Okay, so I promised you five can’t fail promotion types so here we go. 

Promo number one - giving away anything free is a winner!  As customers we love free things but that doesn’t mean to say you have to give everything away. However,  think about gifts with purchase, which are very popular. Ask yourself what can you do to increase the perceived value of the offer in the customer's eyes? Quite often something giving away a free gift or an accessory or giving free support work really well.

The cost to you as a business owner is usually a lot less than actually just giving money off. Yet in the customers eyes their perceived value is very high. This works particularly well if you've got a premium brand. If you think about the cosmetic companies, they always give you a free gift when you spend over a certain amount of money, and that's a very smart promotion because it's not discounting the core value of your product.

And actually if you use it smartly, particularly if you add other criteria like free gifts when you buy something or spend a certain amount, you can really use that to drive up both your purchase price and the profit. Also, anything free is a great way to use up any old stock. You have, you know, stuff that you want that you might be thinking about selling off.

The second kind of promotion which works really really well, is when you do something which in the customer's eyes is exclusive. Now, I've talked before about making your customers feel special, and this is a great way to do that and it works particularly well for existing customers. Think about running Well, an exclusive offer, or a limited edition - something that’s a secret or open to just a few people. These types of promotion make people feel really special because they're getting something that most people don't get. 

And actually these kinds of promotions quite often are not necessarily linked to price. You might have a limited edition product, which in some cases you could even charge more for! These offers can also actually drive not only more sales and profit but they're a great way to get your customers back into your store or website and potentially getting them to buy other things as well.

Right, killer promotion number three: money off. Actual cash savings in a customer's eyes almost always looks better than giving a percentage off and can actually cost you as a business a lot less.

Rightly or wrongly, most people don’t really understand what 20% 30% off is actually worth. People tend to think in terms of the cash in their pocket, so if you can say, I'm going to give you $25 off if you buy this widget, those promotions tend to have a much higher take up and can actually cost you less which means you make more profit.

That brings me nicely on to promotion type number four, which is probably my absolute favorite kind of promotion. It's similar to the money off one, but it's better. Instead of giving some money off that purchase right now, give them a gift voucher off their next purchase.

I'm not talking about a 20% discount voucher or something like that, instead offer an actual gift voucher worth, say, $20 off your next purchase. And that’s brilliant because you're not giving anything away right now. You're getting them customers to come back and buy something else in the future. The take up rate won't be anywhere near 100%, so it will cost you less than other types of promotion and it's a really good way of getting people back to your store. You can even add other criteria such as making it only valid at a quieter time for your business. You can get really creative with this kind of promotion, and I've run this promotion with quite a few clients over the years and pretty much all of them have had great success, even if it can be a bit tricky to administer. 

Right, Promotion type number five is perhaps one that we're used to seeing and it's been around for a long time. But the reason it's still around is because it's popular with customers and it really works. And that's the multi buy offer (aka buy two/ three /four for a price. Now it tends to work more with items that you might want more than one of, but it's really good because it sounds good to the customer (there’s that ‘free’ word again). It’s also easy to understand and people can very quickly see whether it’s a good deal. 

But actually, often this type of promo costs you less than giving money off because a customer has to spend a certain amount of money to get the discount. Again you can get quite creative with these types of promotion, eg and buy this and get something else for half price.

Okay, well, there we are. I said this is going to be short and sweet. That's just five killer promotional strategies which drive both sales and profit. So we're talking about anything free, limited editions, money off rather than percentage using a voucher, some money of your next purchase and a multi buy deal.

Now, I'd suggest you think about trying these in your own business and see which ones might work for you. And I've got a free fact sheet below which summarizes these promotion types so it’s well worth downloading. The other thing I'd say is when you are running a promotion, you must monitor it closely. Is it working for you? How much money are you making in sales and profit? 

And, if it's not working for you, change things whilst the promotion is running, do whatever you need to do to make it work for you. That's the real way to have a successful promotion. Then of course, once you've run the promotion, do a quick wash up on it. Did it work for you or didn't it? What went well and what didn’t?  That way, when you want to run the next promotion, you’ll know for your business what works for you and your customers and what doesn’t.

So, there we go. Also before I go, I also have another free factsheet, which I’d really like you to download, and it's all about turbocharging your cash flow in your business and doing so without selling a penny more.

So if that's interesting as well, click the link below and download it. And if you've not done so as yet, as I mentioned earlier, please subscribe because I'm posting new content every week and I'd love to be able to share that with you. Well, thanks very much for listening. I appreciate your time and I look forward to seeing you in the next video.