Marketing with discounts and promotions

Retailers have been wide and deep discounts when last season with mixed results. But as consumer expectations continue to discount, why companies continue to promote strategies, without losing their shirts?

Some companies' knee-jerk reaction is to reduce everything and anything, but Amy King, vice president of business intelligence in Valpak, warns companies not to rush on a discount strategy, but start with a plan – and then stick to it.

She shares some simple do's and don'ts of promotions and discounts and advice on how companies can manage their campaigns to ensure they are generating revenue.

Best known for the familiar Valpak blue envelope full of discounts, Valpak has been in the promotions game for 40 years and was a pioneer in offering coupons on the Web when Valpak.com launched more than 10 years. Valpak helps more than 54,000 companies per year and has a wealth of experience across industries. "Valpak knows how to structure a strategy that not only discount works, but is profitable, "says King.

Here are five tips that King and his colleagues offer:

1) The discount must be relevant and make sense for your business.

Make sure the offer is attractive to its customers and adjusts to the shape of your customer buys from you. For example, buy one get one free (BOGO) offer appears to be strong on the surface, but if your client does not typically buy multiple at the same time, it is likely to work well. Understand your customer so that the offers are relevant, "says King.

Moreover, companies must focus on the objective of advertising campaign. "Offers must match the behavior you are trying to create," says King. That could mean the use of themes or offers that encourage repeat visits. Also diversify their offerings to appeal to different types of consumers.

2) Be committed to your campaign.

One of the most important parts of any direct mail program is the frequency. You need to advertise constantly for consumers to see and can respond when ready.

"Sometimes a consumer sees the offer, but they do not respond immediately," says John Widmer, Manager of Audience Research Valpak.

Depending on the buying cycle of an industry or personal finances, business must remember that it may take several months or more for a consumer to respond. "That has to do with the need and opportunity," says Widmer. "Consumers seek an offer that is attractive and has value and can respond immediately. But with the high price, the commitment of high-, is likely to take longer to consider the offer and wait until they need to make the purchase. "

"We may not seek you unless you are just front of them when I need it so it's important to post regularly, "says King.

3) Send the right home – do not miss your advertising budget.

  How do you know who to mail? Target your mailings to your best prospects and then decide how large an area of mail.

You would not object in a corner and shout his offer of random traffic right? For best possible use of their time and energy, you would like to target your message to the people most likely to respond. Do the same with your direct mail advertising. Enjoy marketing partners that can provide the latest research, as well as consumers directed by geography, demographics, behavior and past expenditures.

As for how big should be your mail, it is not just a matter of budget.

"When asked," How how much you drive for an offer? "Consumers in our focus groups told us that a better offer, more could handle," said Widmer. "If is a good offer, an offer of high-ticket, then they are willing to go further. "

Now, think about your business. How far can you go? Do not overdo your business to the point where it can affect your bottom line or service level. For example, if you are in a service industry and have a limited number of trucks, you may need to limit the territory where mailed.

4) Balance discounted hard against your bottom line

  "Sure, it offers universal as $ 15 off $ 50 can get customers to respond "Widmer said," The problem is that companies do not take the time to structure discounts that consumers in the door and still make some money. "

"Look at your product mix. Look at your margins … because if you do not, that's where you're going to burn," says King. "Sea intelligent and assess what can reasonably offer. And do not be afraid to put in certain exclusions on specific topics that do not fit the model codes. "

5) "But we can not rule out"

Some companies do not want to discount because they are afraid to cheapen your brand or do not have the margin of support for attractive discounts.

"They are concerned – and should be – to come up with something meaningful and sustainable," says King. "For So there are different strategies they can use. "

• If that can not be ruled out, display their values every day.
• Lead with the offer or statement of value.
• Promote new items at a discount.
• Reward multiple visits to the company. By example, if the customer eats at his restaurant three times, the fourth visit can be free.
• Require the purchase of another item that has a high price as the drinks.

But sending a well-planned campaign is only part of what it takes to succeed with a promotion strategy. Monitoring is essential for success.

Success is a science

And once consumers do not respond, measure performance against its objectives. Was your goal to generate new customers? To manage these calls? Promoting a new menu item? Be sure to compare the results against those objectives.

"And not just staple the coupon to the reception and put on the register. Analyze transactions. Do those user to do is buy the item at a discount or spend more? "Said Keith Malo, Valpak director of research services. Research shows that the discount Well-planned Valpak usually asks customers to spend more.

Be prepared, or it could flop

When companies or offer a discount coupon for the first time may not be prepared for the response that will generate. King warns that it could be a mistake.

"If you bring consumers the experience of your product or service and are not willing to be at your best, you might as well shoot yourself in the foot" said King.

"Educate and train your staff to accept the coupon. Not only for what can be measured, but also by what the consumer feels wanted, welcomed and appreciated. Training your staff to handle promotions coupons is as important as the offer. "

While many companies depend on a seasonal peak, a well-planned, incentive or discount traceable continue to connect its customers throughout the year.

But coming back?

  An offer puts them in the door the first time, whether they come from again is up to you and your staff.

"Build your customer experience so you come back. Want to be a quality provider," says King. "Nobody can replace to offer good customer service – is critical to understand what the experience is like from the point of view of their customers."

Valpak offers advertisers a call tracking tool that allows companies do not track where the calls come, but allows them to listen to the call recorded. "Advertisers are sometimes surprised when they realize what happens in the interaction between consumers and staff.

"A coupon not going to solve this kind of problem, "says Malo." It will create a demand, but it will not heal relationships with customers. "

The way to achieve discounts and success is being prepared. Working with a trusted partner with experience and research what others are doing on the Web. "The best strategy is to do your homework and then measure, measure, measure, "says King." Tracking your ROI is essential for the long term, successful campaign. "

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About the Author

I work at Valpak, where we provide our advertisers with the most effective direct marketing programs by connecting them to our Valpak audience.

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