The easiest way to increase sales is to cut prices, but most businesses try to avoid this. Their reasons are twofold: firstly, they fear that it will erode peoples’ perceptions of the value of their products; and, secondly, it is expensive – effectively it means they must give money to all their customers.

Sales promotion helps companies to overcome these two problems, and as a result is a multi-billion pound industry. Businesses use sales promotions to generate new or renewed interest in their products, as well as increase sales in the short term.

Promotions to increase sales

The range of promotions and offers which are in regular use include:

On-pack promotions contained on the outside packaging of the product.

In-pack premiums, which are special offers only available once the product packaging has been opened. This allows you to differentiate your promotion between buyers who see the outside packaging and consumers who also see the inside.

Multi-purchase offers encourage consumers to try other products, perhaps for the first time.

Extra product has the attraction of only costing you the raw material content but the consumer feels the full benefit as if it had been supplied at the purchase price.

Free product is a promotion used as an encouragement to first time buyers in the expectation that they will like the product and become a regular user.

Money off vouchers and money off next purchase give the customer extra value, but only when they buy more product or repeat purchase.

Competitions, draws, sweepstakes allow you to offer larger rewards to smaller groups of customers. All those taking part feel some benefit; as if they were receiving say a free lottery ticket. You also have a newsworthy main prize, which can attract a lot of interest and perhaps publicity.

Promotions and offers must comply with certain, often stringent, legal requirements. It is also in your company’s best interest to not upset customers by failing to meet reasonable expectations. The areas to consider when putting a promotion together include:

  • Precise nature of item on offer
  • Limit of entries per household (if applicable)
  • Number and actual proofs of purchase required
  • Despatch date – period within which goods should be received (not more than 30 days)
  • Consumer participation limitations (e.g. age limits, number of entries, no employees/agency)
  • Promoters name and address and company registration particulars
  • Exclusion of responsibility for applications lost, delayed
  • Closing date
  • Judging criteria
  • Winner notification and timing
  • Availability/access of winners list and results