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What are promotional offers?

Promotional offers are a type of communication between the buyer and the seller. The seller tries to convince the buyer to purchase their goods or services through promotions, helping to raise awareness among people about a product, service, or company. It also helps improve the company's public image.

• This marketing method may also spark interest in the minds of buyers and can also generate loyal customers.

Promotions are one of the essential elements of the market mix, which includes the four Ps: 

• Price.

• Product.

• Promotion.

• Place. 

What is the difference between marketing and promotional offers?

Marketing would not be fully effective without promotional offers, as both serve different purposes. 

In short: 

Marketing focuses on increasing awareness of the product and putting it in front of potential customers, while promotions are the final step in marketing—they provide the necessary incentive to convert visitors into buyers.

We can say that: 

Marketing VS Promotion = Awareness VS Conversion.

What is the marketing mix?

Neil Borden coined the marketing mix in 1964, and it is defined as a set of marketing tools that can ensure the success of a product or service in a competitive market. These include product, price, place, and promotion. The marketing mix was later expanded to include three additional elements—packaging, positioning, and people. It is also worth noting another part of the marketing strategy: advertising.

Advertising versus promotion is a different story and requires a separate article to cover.

What is promotional marketing?

Promotional marketing is a form of marketing communication that seeks to inform customers about the company's current and future activities and offers, shape a positive brand image, build positive relationships, and stimulate demand, in accordance with the individual business strategy. 

Promotions are used across all industries and in many different contexts as they can help achieve all key business goals, such as acquiring new customers and building customer loyalty. 

In short: Promotional marketing helps present your product, stimulate demand for it, and build an appropriate differentiation strategy.

The easiest way to understand the promotional mix is to imagine it as a conversation between the buyer and the seller, where the seller tries to persuade the buyer to purchase a product or service using promotional offers.

How will the seller convince the buyer? Through promotional offers, which usually refer to incentives, special offers, and rewards.

At Voucherify, we understand promotional campaigns as the use of six tools: coupon promotions, shopping cart discounts, referral programs, loyalty programs, gift cards, and giveaways.

Types of promotional marketing

In marketing, we can differentiate between more than six types of promotional marketing:

• Personal selling: One-on-one communication with customers. Expensive in terms of time and resources, but it tends to be the most profitable among all types of promotions.

Also, advertising through targeted messages that enhance brand awareness among existing and new customers.

• Direct marketing: Unlike advertising, visual marketing directly reaches customers who are already familiar with your product or service through social media, email, and SMS.

• Public relations: Used to build a constructive brand image.

• Lobbying: Used to influence public opinion.

• Merchandising: Influencing customer behavior through the appropriate presentation of the store and the products displayed to increase sales.

• Promotions: Used to stimulate demand through various incentives, such as discounts, cashback, free shipping, gifts, and more.

What are the main types of sales promotion?

There are two different promotional methods you can use: price promotions and non-price promotions. 

First: Price promotions

In this method, the focus is on reducing prices in the hope of increasing sales; you can think here of discount coupons or BOGO promotions.

Second: Non-price promotions

In non-price promotions, the focus is on the additional value generated by the promotion, not the price itself. 

Examples of non-price promotions include sampling, contests, or free gifts. Depending on your business type, different promotions will resonate better with your audience. However, the consensus is that non-price promotions tend to be more effective and creative. 

From a practical standpoint, they are also cheaper: the results you can achieve are much higher than the promotional costs incurred.

What are the benefits of promotional offers?

Promotions can serve many goals. Here are some of the most important benefits companies get from a well-thought-out promotional strategy:

1. Presenting a unique selling proposition

A Unique Selling Proposition (USP) is simply a way to define what makes your company different from competitors. A strong USP gives customers a reason to choose your offer over your competitors.

Analyze your brand's strengths and weaknesses to come up with a compelling USP. Make sure to make it unique to your brand and clearly visible at a glance. Once you have a consistent USP, you can start building a marketing strategy promotional campaign around it. Promotional marketing on its own can be a unique selling proposition if your competitors do not offer any interesting sales promotions.

2. Improving brand perception

With a smart promotions strategy, you can build an interesting brand story and position your business in various ways. For instance, if your customers are interested in sustainability and environmental topics, you can run charity promotions where you donate a portion of each purchase to charitable causes. Promotional marketing can help you shape the lenses through which customers will see your brand.

3. Converting visitors into long-term customers

The primary goal of promotions is to increase company revenue while staying within the allocated budget and increasing selling and customer service skills. Marketers have a wide range of promotions to attract and convert shoppers, ranging from open-for-all promo codes to free promotional gifts and social media contests.

How do you plan a promotional campaign?

Imagine you are a store owner who wants to develop their marketing. What would you do?  This guide is a good starting point to become a professional in promotions:

1. Identify the product

The first thing to do is identify the promotional product. Keeping costs and margins in mind, you should choose products whose potential revenues cover promotional expenses. In addition, it is important to identify products similar to the ones you want to promote. Advertising and promotional activities around a substitute product with a large margin may lead to what is called cannibalization, resulting in a lower margin than pre-promotion. Keep in mind also that not all promotions have to be product-based. If this is true for you, skip this step entirely. ‍

2. Understand your audience's needs

When choosing a product to start promoting, you must also determine the target audience for your campaign; because this is useful in communicating with consumers, as knowing their preferences and inclinations will enable you to better adjust the offer. A promotion aimed at a specific group of people often brings higher profits than if it were aimed at everyone.

3. Define your promotion goals

By defining the goal(s), you can choose the work tool effectively. You can use sales promotions to achieve multiple marketing and sales goals.

Here are some of them:

• Increase sales during the off-season.

• Stimulate demand for the product.

• Increase customer loyalty and brand awareness.

• Introduce a new product line.

• Create a competitive advantage.

• Better flow of information about new products and services.
  
  

• It is worth noting at this point that most experts on the subject emphasize that promotions generally do not build brand loyalty, as they primarily attract price-driven customers. Because a buyer loyal to a specific brand will not change their preferences in response to competitors' promotional offers. So, in this case, promotional efforts will increase sales in the short term but will not lead to a continuous increase in market share.

4. Choose the right marketing channels

Communicating with consumers depends on who you want to reach, the nature of the target group, and the product being promoted. In addition, the scope and intensity of the campaign (i.e., broadcast frequency, number of viewers and listeners, etc.) should be considered, as well as its impact on a specific recipient.

Remember: There is no point in promoting women's shoes in an exclusive men's magazine or a luxury car in a magazine for youth. Some products will be better promoted by digital ads and others using traditional advertising.

5. Set a promotion budget

At some point, you have to start planning and calculating the money. Analyze how much money you can spend on promotions, taking into account current marketing strategies, expected ROI, taxes, vital expenses, and product development. Try to find ready-made promotional solutions that can reduce development and maintenance costs. Remember that the budget must be adjusted according to market size, product specificity, competitors' activities, and the target group.

5 Promotion ideas with real-life examples

There are plenty of brands competing for a limited budget, and we have gathered more than 10 examples of promotions used by both small businesses and huge enterprises: 

1-Free shipping promotions

Free shipping is one of the most common (and profitable) promotional tactics for online retailers. By offering free shipping, you may make your customers pay more than you expect. So, consider using free shipping in conjunction with a minimum purchase requirement to increase the average order value.

2-Discount for new customers (tripwire promotions)

Discount coupons are a great way to increase conversion rates and make your offer stand out among competitors. For example, you can offer a discount amount or percentage on the next purchase and deliver it to newly registered customers via email. Usually, companies tend to offer highly attractive discounts to first-time shoppers to convert them. These are called tripwire promotions.

3-Cart abandonment offers

Abandoned shopping carts are one of the biggest challenges in online sales. This is confirmed by statistics—according to research by the Baymard Institute, up to 69% of online shoppers end up abandoning their cart. 

Promotions are the perfect way to nudge customers along the sales funnel and motivate them to complete their shopping. 

4-Customer service discounts

You can apply automatic discounts to all customers who have opened a support ticket. In this way, you immediately address any bad feelings or dissatisfaction on the customer's part and increase the chances of resolving the ticket successfully and amicably. You can also use regret discounts in case your brand encounters major technical challenges that affected a large segment of shoppers.

5-Seasonal promotions

A seasonal promotion is any type of promotional activity (e.g., special offers, discounts, and limited-edition items) inspired by holidays, celebrations, and seasons. To capitalize on specific occasions, you can launch a special gift card or discount campaign. Seasonal promotions tend to be highly effective as customers expect special deals during holidays and celebrations and are less likely to be annoyed by the promotion.