Sales promotions are excellent strategies to augment revenue. They give a compelling reason for customers to prefer your brand over others. Effective sales promotions can elevate market share by offering a unique proposition. FMCG brands often run sales promotions solely through a particular supermarket or convenience store to boost revenue via that route. Broadband operators or insurance firms can leverage sales promotions to encourage more advantageous consumer behaviours, such as promoting direct debit payments or e-invoicing. Sales promotions can be highly effective for various reasons. It’s crucial to understand the rationale behind your sales promotion to evaluate its success.
1. Technology in Sales Promotions
There are numerous methods to implement a promotion. FMCG often opts for on-pack promotions, which typically involve printing unique codes on packages. It’s important to factor in lead times and budgets when considering on-pack promotions. Receipt and image recognition technology is a beneficial tool for sales promotions. Customers can snap a photo of their receipt and upload it to a promotional website or choose to send a copy via text. Sales promotions can utilize various platforms, including social media, SMS or WhatsApp. Understanding your customer base and deciding which execution will offer the best customer experience is crucial in choosing the platform.
2. Budgeting for Sales Promotions
The budget plays a vital role in determining the kind of promotion. Sales promotions can present the customer with a reward for each purchase, a chance to participate in a competition, or a discount coupon. Running a competition is a budget-friendly option. Regardless of the number of qualifying participants, the cost of the sales promotion remains fixed, i.e., the competition’s cost. However, if a brand chooses to reward each customer who buys the product, the reward’s cost will depend on the number of customers who qualify for it. If the sales promotion is highly successful and many customers are entitled to the reward, a higher budget than initially planned may be required.
A Fixed Fee safeguards against over-redemption costs, providing complete financial security
3. Insuring Sales Promotions for a Fixed Fee
The type of promotion will determine whether promotional risk management is needed to curtail your company’s financial risk in case of over-redemption and costs surpassing the set budget. A Fixed Fee safeguards against over-redemption costs, providing complete financial security.
4. Picking a reward
The reward offered should be directly proportional to the value of the product and the effort required from your customer. It must take into account the customer’s demographic and be enticing and accessible enough to drive and inspire your customer.
The concept of ‘Everyone is a winner’ is one where every customer who accomplishes the required action or makes the purchase is entitled to the reward.
Several profitable sales promotions present customers with winning opportunities. Some others offer discount coupons.
The reward remains a pivotal element in the success of a promotional campaign.
5. Is a Lottery License required for a Sales Promotion?
If your promotional strategy involves a competitive element and you intend to offer your customers a chance to win a major prize or multiple prizes, a lottery license might be necessary.
A lottery license will be required if your customers need to make a purchase at some point to qualify for entry and the winner is chosen randomly; for example, in a lottery or a sweepstake.
Even after obtaining a lottery license, there are certain rules pertaining to the prize value that are linked to that license. Nevertheless, there are strategies to structure your promotion to circumvent the requirement for a lottery license.