The competition is fierce. The market is segmented. This is probably why a Social Media Sales Promotion is being utilized by a lot of small businesses across all industries. After all, sales promotions are an effective way to introduce one’s products without denting customers’ wallets and in turn, a way of gaining new customers. Right?
The answer to this is a little more complex than a simple ‘yes.’
The Shutterfly Case
Let me cite a personal experience to clarify my point.
I am a fan of Shutterfly, Inc., the creative platform for personalized photography products and communications. I have been creating large photo books with lay-flat pages and have always utilized the maximum number of pages offered- roughly 110 pages. The catch? I have always purchased their product during their 50% discount sales. On the flip side, I’ve created 12 books with them.
Although the regular price for my average book would be $400 or more, I’ve never had to pay in full for their services. Am I a profitable customer to Shutterfly? This is a question the company has to answer. Do these regular promotional offers work for them? This too is a question they have to answer. It is also a question I raise for the purpose of this blog. One thing I am certain of and that is their quality is exceptional. No questions there.
What I’ve observed is that now Shutterfly discount offers are available at all times, although there was a time they were rare to come by. Since these 50% off offers are so frequently available, whoever pays the full price to piece together a photo book is simply silly. Why is Shutterfly regularly hosting sales promotions? Are they making profits with these promotions? They have to maintain a good enough margin to be able to make these promotions work. If you don’t want your business to exist in an all-time promotions situation, here are 6 factors to consider when drawing up your Sales and Marketing Plan (SMP).
Success Factors of a Strong Social Media Sales Promotion:
- Ask these questions to determine what your business case is for your promotion. Include the promotion in your SMP only if you are satisfied with the answers.
- How much does the promotion cost me?
- What are the auxiliary costs created because of the SMP?
- What does it cost me if the promotion is optimally successful?
- Make sure your promotion includes more than just a percentage slashed off your products. In the long run, this could affect your business adversely by devaluing your product, crippling your pricing bar, and creating false expectations among returning customers who could be deterred by regular prices.
- Offer additional services or a dedicated promotional item that does not take away from the pricing or the attractiveness of your core products.
- Alternatively, bundle products in order to qualify for promotions. This could entail offers such as:
- Buy multiple items to get a discount on one half of the bundle
- Bring another customer for a discount for both parties. Make that contingent on the new customer spending a certain amount.
- Turn customers into members by offering a smaller discount in return for their email address or mailing address. Email and mail marketing to registered customers are successful tools to generate lasting revenue. If your social media promotion allows you to achieve this, it’s a worthwhile investment.
- Limit promotions within a time-frame and clearly define a deadline. The setting of deadlines would require taking time zones into consideration.
No doubt, social media promotions, when done right are a powerful sales tool that you can utilize to increase your reach. Next time you are considering hosting a promotion, look at this checklist before going live with it!
I’ll be happy to help you create a plan or review yours.