Promoting Your Business
Important topics in marketing include market research, sales, customer service and business development. Another branch of marketing called marketing communications includes advertising, public relations, and promotion.
The latter, promotion, involves the use of an extremely diverse collection of tools, incentives, and programs that promote your product or service.
They are generally short term in nature and are designed to stimulate a quicker or greater purchase.
One of the most effective promotional tools is the free sample. This is particularly useful if you have something new that people have not tried before. Usually the marginal cost of producing these free samples is a fraction of the price, making it cost effective. Samples can be used in the service sector as well as with products. Free consultations, a small sample of your work, or a brief trial period could all work for your service business.
Frequent customer programs are good at promoting your business. Here, you reward your loyal customers with a ten-punch card or a frequent-use system where, after so many purchases (frequently 10), they get one free. Customers feel good about this program and they remain loyal. It is important to make this frequent program easy to use. Capture their records electronically or have their cards at your place of business so they always get the benefit. The goal is their purchase frequency, not to make them carry a card. Maybe you can give them a ticket that will give them their punch the next time they are in your store.
Promotional pricing can be an effective tool but also can be misused. The loss leader can be useful if customers have other purchases to make. Discounts can have a stimulative effect especially in periods of low demand. However, care must be exercised to avoid “diversion”. This occurs when a customer was going to buy anyway - you didn’t stimulate the purchase, you just sold it for less. Research has shown that deep discounts are needed to stimulate a purchase. These are in the order of 40% or more. A 5 to 20% off “sale” just doesn’t have much ability to get someone to buy. You just give away 5 to 20% of your revenue. Sometimes combining discounts with multiple purchases is more effective. This could be 50% off the second purchase or the 4th one free, type of offers. Sometimes you can show a promotional discount by combining two different products-a mop and a cleaner, a car and free gas, or free dessert with dinner. Sometimes you can partner with other businesses-hotel room and air fare or dinner and a free movie. The combinations can be endless.
Another promotional subject goes under the names of trash and trinkets, goodies, or giveaways. These are the pens, cups, key chains, refrigerator magnets, mouse pads, etc. etc, which are ubiquitous. They have your contact information on them and can be very effective. Every business needs them but they must be relevant to your business. A tasteful pen works for an accountant but a fuzzy bear on a key chain doesn’t.
There are literally hundreds of promotional ideas for your business and these ideas can come from anywhere. Sometimes the most goofy ones work (and sometimes they don’t). Like anything in marketing you must measure their effectiveness. Ask some of you best customers what they like and whether your next promotional idea is a good one. Measure the results. But what ever you do, make sure you promote your business - no one else will.
This article was written by Seattle SCORE Chapter member Fred Parkinson for the Kitsap Sun in Bremerton.