According to a study by Consumer Goods, 55% of the amount spent on trade promotions fail to grow the brand for both the manufacturer and the retailer. That’s why both the parties need to dig deeper into data, roll up their sleeves and start thinking out of the box to make it all work.
So we dug out some trade promotion strategies that have proven their worth when it comes to skyrocketing your sales.
Trade Promotion Strategies That Increase Sales
1. Focus On The In-Store Display
About 65% of consumers are visual learners. In fact, visuals are what also increase a brand’s stickiness by 42%. That’s why what, where and how your customers see your products at a retail outlet, matters.
For instance, it is usually a given that the products placed at the centre of the shelves, on the same level as that of a consumer, are hot-selling. Those that are placed on shelves further down tend to give the feeling of old stock or faulty pieces that the store doesn’t want the consumer to really look at.
Some of the things that your trade promotion strategy should cover for in-store displays include:
- Signs, banners and posters
- Special display racks
- Lifesize standies
- Floor stickers
- Product demonstrations
2. Offer Deals And Discounts
Most of your online consumers are price sensitive. How much a product or service costs, has a big impact on the purchase decision made by the shoppers. For instance, not everyone is going to be convinced by a 10% discount on a product pricing that is otherwise ‘premium’.
Your trade promotion strategy should include temporary price reductions to appeal to this segment of the shoppers. It works for both your existing customers to make more purchases, and to attract new ones. But even these need to be timed well!
For instance, the holiday season. We all know how everyone wants to be able to buy the best Christmas gifts for their friends and family, but at the same time, we’re also looking for good deals to the bag. Ideally, a manufacturer should nudge the retailers to start promoting the offers at least a month prior to appeal to the planners.
In this case, leaving discount promotions for the end could lead to your campaign getting lost in the volume of brands trying to get attention to boost their last-minute sales.
3. Appoint In-Store Demonstrators
Imagine walking into a store that has similar products from different brands on offer. Now you might like to go for a brand that you have previously purchased. But there is also a chance that you want to go for a product that seems better from a newer brand. As a consumer, you tend to get overwhelmed and confused with regards to which brand you should be going for.
In such cases, having an in-store demonstrator or a salesperson can assist the customer in making a more informed purchase. They can even use the opportunity to strike a conversation, convince and convert them on the brand they are presenting.
4. Offer Product Sampling
According to a study conducted by Arbitron and Edison Media Research, 35% of consumers who are offered a sample of the product, will buy the product in the same shopping trip. The study also suggests that about 24% of consumers actually end up buying a sampled product in place of the one they had planned to buy.
This strategy always works because you’re letting your customers experience your product before nudging them to purchase it. This instils the feeling of trust and removes all apprehension regarding the purchase. It is also a great way to introduce new aspects of an existing product or new products that have just been launched.
Pretty much similar to how you walk up to a makeup brand and test the products before making a purchase.
5. Leverage Co-Promotions
Just when the festive season kicks in, the newspaper ads start to show deals on different products. But what they also additionally provided in the advertisement, is a list of retailers that you could avail the offer at. The co-promotion here helps increase the reach of your retailers and drive in more sales.
To make this trade promotions strategy even more effective, localize your efforts. Going region wise will help you drive more sales at all the retailers you’re aligned within an area and also be able to show how accessible your products are.
6. Use Gamification To Encourage Retailers
Competitions are a widely used tactic at automobile dealerships. The concept of this competition is fairly simple – the one gets the most number of sales during a season, get acknowledged with an award of a benefit that motivates them to continue their efforts till the next season.
Gamification keeps your retailers motivated and on their toes, trying out new strategies to further improve the results of your trade promotions. You could apply the same strategy to your sales team, incentivizing their efforts to drive more sales.
7. Attend Trade Shows And Exhibitions
To give your sales a much-needed boost, arrange for trade shows or ask your retailers to participate actively in exhibitions in the target market you’re aiming at. These events give you an opportunity to reach out to a mass audience, introduce your product, get feedback and at the same time, acquire new customers.
Striking a conversation with a consumer and giving them a physical view of your product, can be a huge driving factor for sales.
Now while there are a number of ways to implement the above strategies, it is important to equip yourself with the right tools.
Tools for Efficient Trade Promotions
1. Trade Promotion Optimization Software
The very first tool you need to get is an optimization software for your trade promotions. The tool should be able to eliminate the time consuming, error-prone promotion data management processes, and make measuring and planning of campaigns more actionable. The software you choose should enable you to track results in real-time and make adjustments accordingly to improve the sales reflections.
The trade promotion optimization software you choose should enable:
- Data harmonization: Getting all your internal and external data sources – sales, past promotion data, marketing campaign, digital media, weather, events, syndicated data integrated on one platform to compare and analyse results effectively.
- Measurement: The ability to measure the sales uplift and ROI of specific promotional events to optimize campaigns effectively.
- Strategic analysis: An aggregated view of the individual events analysed while measuring the results of a promotional event.
- Planning: Ability to provide data-backed insights for planning future promotional activities backed by the learning from the strategic analysis of data.
- Optimization: An easy mathematical model to provide the ability to create the best promotional calendars, based on a series of constraints identified by a user.
If you’re interested to learn more about trade promotion optimization softwares, you can have a quick look at our AI-Powered TPO solution, Compass. Equipped with post promotion analytics, Compass helps you measure the effectiveness of trade promotions and profitably optimize your trade promotions. It harnesses real-time data from multiple influential data sources and consumer touch points and provides crisp recommendations on the right type of promotions to be run and when. It also forecasts sales for different promotion combinations.
Measure & Optimize Your Trade Promotions Effectively
with Compass: An AI-Powered Trade Promotions Optimization Solution
2. Trade Promotion Management Software
A typical trade promotion management software is used for internal execution and the operational part of trade promotions. This includes tasks like defining new promotions, allocating budgets at various stages for different departments, retail activity management, tracking promotions, authorizing payments, and managing funds, etc.
Making Trade Promotions Work
Companies today simply focus on increasing the frequency of their promotions or the amount of discount they offer on products and services. They don’t dig deeper to understand the consumer psychology behind market responses, and hence lack an actionable plan that leads to disappointing results.
To make trade promotions work towards giving your company a sales lift, it is important to drive all your growth strategies with data. Consistently monitor your efforts and optimize based on data, to know the ‘why’ behind what works and what doesn’t.
If you’d like to learn more about this topic, please feel free to get in touch with one of our digital workplace consultants for a personalized consultation.
How An AI-Powered Trade Promotion Optimization Software Can Improve Consumer Goods Revenue Margins By 2%