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Do promotions really work?

We all like a good deal! But do promotions really work in terms of driving sales? What should you be thinking about when planning your promotions?

Typically, promotions are used for three reasons:

- To drive footfall and encourage new customers to try your business e.g. 10% off first order
- To encourage existing customer to come back more often e.g. loyalty rewards
- To encourage a higher spend per visit e.g. buy one get one free, or offers on 3 course meals

It is worth making sure that you consider which of these areas you are targeting with any given promotion to make sure your messages and calls to action are appropriate and efficient in terms of achieving your goal, and to make sure you have a mix of promotions that helps across all relevant areas.

It is also worth dedicating a bit of time to looking at what uplift you expect from any given promotion to ensure this will cover the loss of revenue from discounts offered. For example, if you are a café offering a loyalty card where a customer has to buy 5 coffees to get the 6th one for free, make sure your £ profit on the 5 coffees sold covers the cost of the 6th coffee (and ideally leaves you with a little extra, as you will need money to cover the cost of the loyalty cards and stamps, too!). If profits are tight, you will need to either review the product price, or consider increasing the number of coffees a customer needs to buy before qualifying for their freebie.

Promotions can definitely help create an interest in your offering, and they can help drive loyalty. Just be mindful that you use them tactically and do not ‘train’ your customers to become reliant on the promotions all the time.

To view our current range of promotional offers, please click here.