Sales promotions are a popular tool to generate a short-term increase in sales. For instance, your local DIY store may give you a voucher offering a discount on purchases made on, or up to, a particular date. The initiative encourages you to visit the store sooner or more often than you would do otherwise, possibly spending more money and buying items that you would not normally buy.
However, sales promotions also perform another, often ignored, role: they contribute to brand equity. Receiving a voucher in the post, or by e-mail, not only triggers the perception of need, it also reminds me of a specific brand, thus enhancing brand awareness. In addition, it will elicit a range of feelings, associations and judgements, which define the brand image. See all these in action in the following example.
Last week, I received two vouchers from Abel & Cole in the mail. Abel & Cole is an organic fruit and vegetable delivery company, and I ordered from them a couple of times in the past – the last time around Christmas / New Year. One of the vouchers had no addressee, informed the recipient that Abel & Cole delivered weekly in my area, and offered the following: ‘Here’s the deal! Order a weekly box of summer fruit & veg (prices start at just £8) and get the 4th one totally and utterly FREE’.
The other voucher was addressed to me, specifically, invited me to be a ‘comeback kid’ and asked ‘Why not give us another go?’. Furthermore, it presented this offer: ‘Order a weekly box of summer fruit & veg (prices start at just £8) and get the 4th one totally and utterly FREE. You also get an Abel & Cole cookbook FREE with your 2nd delivery to help you sail through the seasons! All you need to do is quote the code ‘comeback kid’ when you order’.
The mailing had various effects. It reminded me that I needed to re-stock on fresh vegetables. I also mused about how convenient it would be to have the various items delivered to my door, instead of dragging two bored children to the supermarket and, then, carrying everything back home. Looking at the vouchers, I could not immediately recall any other brand in this £170m/year market – though, I am positive that I enquired about the various suppliers before ordering my first fruit and vegetable box last year. The informal and uplifting use of language was refreshing and unpretentious. And last, but not the least, I reasoned that this company valued customer retention above customer acquisition – the opposite feeling that I get when it is time to renew my mobile phone contract and I realise that new customers get much better deals than existing ones.
In addition to the content of the vouchers, the timing is also important. A company that wants to build a close relationship with the customer would send vouchers at times that are important to that customer as opposed to, say, in a rush to boost end of year sales – for instance, sending customers a discount card for their birthday, as Sunglass Hut does or, indeed, my beautician (though she could take her insight one step further and send me the voucher 1-2 weeks before my birthday, not on the day).
In summary, there is a tactical as well as a strategic side to sales promotions. Using simple insight, you can easily generate additional customer value without adding to the firm’s cost.