The Current Economic Shopper: Part 3, Promotional Marketing

(Originally posted May 2012)

Last week, we discussed Community Marketing and how to use this strategy effectively. In the third installment of our four-part series on the Current Economic Shopper, we will discuss Promotional Marketing and strategies to both utilize and avoid.

Using promotions to drive sales is a great marketing tactic-sometimes. While discounts and coupons can bring about short-term success, in the long-run they can end up causing more harm than good.

Over time, constant sales condition shoppers to expect reduced prices and anticipate sales. Instead of buying something full-price, they will wait for the item to go on sale. Even worse, customers may begin to view the retailer as a discount brand. In order to maintain a certain brand image while satisfying the customer’s craving for a good deal, retailers should engage in carefully planned promotional marketing.

Short-run sales are an excellent way to bring in customers. While they could be based on seasons or holidays, many retailers create their own events that shoppers grow to love, such as Nordstrom’s semi-annual shoe clearance. By emphasizing the brevity of these events, retailers create a sense of urgency and exclusivity. This strategy gives customers the deals they yearn for without negatively impacting the brand image.

Offering gifts with purchases rewards customers for spending more. While Buy One Get One offers do drive sales, they are typically associated with discount brands and should not be used by all retailers. However, the basic concept is applicable to most. Selective messaging that positions the deal either as a gift or free sample with qualifying purchase encourages customers to spend more. These special promotions should be used sporadically so customers don’t learn to expect them or wait for them.

Loyalty programs are exceptionally useful forms of promotional marketing. Not only do they make loyal customers feel appreciated, but they encourage them to spend more money more frequently. If a customer knows they will be rewarded for shopping in a certain store, whether through exclusive sales, special offers, or free gifts, they are more likely to be a loyal customer.

Promotional marketing should be used carefully. To maintain a specific brand image, promotions should be targeted, offered for a limited time, and constructed in a way that only rewards a customer more if they spend more.

What are some great examples of promotional marketing you’ve seen? Have you witnessed any examples that completely backfired? Let us know in the comments!