People love discount and privilege cards. That is why most entrepreneurs take this as an opportunity to incorporate raffle promos and other gimmicks in their marketing strategy, to spur purchases resulting to increase in sales. This is also a good way to market a new product to the public, without having to spend on advertising. And you can do the same thing for your business too.
But before offering promos, there are certain factors that you consider. Here are the 5 things you should know when conducting cost-effective raffles, promos and sales that we learned from our mentoring session with Ms. Angel Gaffud of Poli Medical Trading:
There are many ways to attract customers; all you have to do is identify which one works best for your business.
Using testimonials is one effective way to build trust to potential clients. In fact, it is even more powerful and more convincing than a direct sales pitch. Because people, get influenced more by testimonies of other consumers who already have experienced the product/service. And these feedbacks can be a compelling factor for consumers to give your product/service a try.
Another way to get more customers is through offering loyalty or advantage cards. They patronize a brand, because it offers some “perks” – something they can only avail if they are a member or a card holder. Take for example S&R, a membership shopping club wherein only members are allowed to shop. Although it connotes exclusivity, members are given good deals which only they can have an access to.
And last, but definitely not the least, is couponing. If they have coupons orbooklet offers, you are always on top of their minds because they will have to consume it before it expires and be wasted. This would drive more customers to your shop and boost your sales. However, you have to make sure that the customer will have a superb experience, so they can be your own ambassadors.
Businesses offer promos to drive more sales, introduce a new service or improvement, reinforce loyalty, or to tap new segment. However, promos are just a part of the entire strategy you have for the business. It is not the strategy itself.
Promotions that usually require long duration are raffles, loyalty cards, switch promotions, and referral incentives. Those that should be kept short and tactical are price discounts. When it comes to frequency, there is no rule as to how many times you can do your promotions. It will only depend on your objective or the problem you are trying to solve.
Raffle promos, may last up to 3 months but never for a year. Sales discount and price promotionsminimum duration is one day. Usually, the bigger the discount, the shorter the duration so you can avoid hoarding and still have sales next month; while promos related to freebies usually depend on your budget and season. A good example for this is SM 3-day sale.
One way to measure the effectiveness of your gimmick is to have metrics from the beginning of the promo. You should have a clear understanding of your objectives, whether for increase in sales or product introduction. However, be careful not to offer a continuous promo; otherwise it can drain your profit plan and your brand image.
People love to get free items. This is why most businesses give out freebies for every transaction that customers do with them. However, it can be quite tricky and expensive to do this.
Some businesses give out giveaways just to anyone, without having criteria for the eligible recipients. Although it attracts more consumers, it can also be a factor that can affect your profit. That is why you will need to be crucial when it comes creating a qualifier for your customers for them to avail the free items. For example, you can attract your buyers with a “special gift”, which they can only get once they accumulate certain amount of purchase. Or, you may also offer a freebie based on how many times they made a transaction with your business.
It is important that you have knowledge on what could possibly go wrong when conducting promotions, so that you can avoid doing it. The following are the three common mistakes that you should learn from:
a.) No Clear Metrics at the Start of Promo – you need metrics in order to measure the effectiveness of your promo. More than just implementing it, you need to be clear on what you want to achieve.
b.) No Support – you need to keep track the progress of your promo on a daily or weekly basis, so that you can immediately take an action on the challenges and get things back on track. Also, always check the feedback of your customers. This will come in handy once there are unforeseen glitches during the promo run.
c.) No Communication Plan – more than just running the promo, you need to study how the customers will know about it in the first place, and if your effort is enough for them to avail your promo.
Raffles and promos are regulated by the Department of Trade and Industry (DTI) and Bureau of Food and Drugs (BFAD). These governing agencies have set certain guidelines in order to protect consumers from scams or any anomalous activities. For instance, BFAD may not allow businesses to bundle free items that don’t have BFAD approval even if it’s offered for free. Or when it comes to getting permit, a business needs to go through some evaluation process before they can implement the promo.
They also have set a corresponding tax to pay for valuable items such as house and lot. You can check out their website for the specific guidelines. Click here.
Angel Gaffud has a wide experience in Marketing Management. She worked as a Marketing Manager in various companies such as 3M Philippines, URC, McCormick Philippines, Unilever, Avon Cosmetics Inc and BonChon Chicken Philippines.
Angel is currently the Marketing Manager of Poli Medical Trading, a food and health supplement manufacturer from Singapore, makers of Trulife Collagen Plus Vitamins.