A company can offer attractive price reductions to boost sales or introduce new products to the public.
For SMEs, promotions are the ultimate weapon. The aim is to create a strong impulse to purchase for a short period of time. The effectiveness of this method is often impressive. Promotions such as coupons or discounts help win new customers, win back old customers, encourage consumers to come to a store more often or improve sales during peak times, as bars do with happy hours.
There are several ways to run promotions:
- Price reductions. Percentage discounts (at least 50% off shirts for example), “two for one” offers and other types of reductions often attract customers. The more attractive the offer, the more interested customers will be. But precautions should be taken: companies should not attract customers who are only interested in the promotional offer and do not look to use the SME’s services in the long term.
- Samples or a free trial. This method makes it possible to introduce new products to the public. For example, perfume brands systematically offer samples of new fragrances to promote their products. This method also helps draw customers away from the competition.
- Events. Events bring crowds into a store or a business, boost sales and can even attract media attention. Product launches, VIP visits, celebrating the company's anniversary and holidays are all excellent excuses for inviting customers in.
- Coupons and discounts. A coupon means customers save money at the time of purchase. A discount offers money off when making a subsequent purchase. In general, less than 2% of coupons are actually used, but they always create a good impression on the customer.
However, keep in mind that promotions carry a major risk: if customers would have bought the product at a high price anyway, the company’s profits may decrease. This allows some customers to stock up during the promotion period and stop purchasing once the promotion ends.
Sources: Hiam, A., Heilbrunn B. “Le Marketing pour les Nuls”, John Wiley & Sons, Inc, 2021; Small Business Marketing Kit For Dummies, Barbara Findlay Schenck, John Wiley & Sons Inc, 2012.
