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The effective use of promotions and sales.

Posted by Logan Marshall on August 25 in 2. Marketing |

Everyone loves a bargain.

Make no mistake everyone love to get something for nothing or at least to get something for cheap. It’s human nature that if a person can get the same item for less they will do. They’ll even be willing to sacrifice a little in the way of quality in order to do so. There have even been psychological tests in to this phenomenon, and there are a number of theories as to why it occurs. General consensus is, though, that while most of us love to spend money the feeling of satisfaction and even victory when we get a product for free or cheap is greater than our love of spending money.

Advantages of promotions.

When you start a new business you need to make your customers, or potential customers, trust you. A person will not give you money if they don’t trust you. One of the easiest ways to promote this feeling of trust is to give something away. If you offer a service, as a pose to a physical product, this is even truer. By offering a free sample of your product or service you can show customers that you not only have what they are looking for but you can show them exactly how good it is. Customers will be much more willing to buy the goods if they have had chance to use them and evaluate their effectiveness in the first place.

Promotions promote more business.

Sales and promotions are a good way to encourage people to spend more money. Many of us fall foul to this marketing trick on a regular basis. How often have you been shopping online and found the item you want at a good price, only to see that if you spend another you will get the postage for free. So, what do you do? You spend enough to take advantage of the free postage. You usually find that this will equate to a little more than the required and you may even buy something that you could easily do without. This is a highly effective marketing ploy that persuades customers to spend more money.

The downfall of promotions and sales.

Despite the effectiveness of these marketing techniques there are still negative aspects to the use of each of them. Giving something away is a practice that should not be taken lightly. If you live to a very tight profit margin on your items then a sale can sometimes be out of the question and as a new company it is unlikely that you will have a good pattern of consumer’s behaviour. Using the free postage example you need to be very careful. If you work on a set percentage of profit across all of your products then you should be able to easily calculate the level at which you can offer this benefit. For instance if you work to a 10% profit on every single item you sell and you use a postal service that costs then you know that by offering free postage on orders over you are only likely to break even because your 10% profit equates to ; the same amount as your postage.

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